Dr. Healy's June MSR Index

MSR values on newly originated loans remained relatively flat in June. Rates increased from last month, which pushed up the discount rate (negative impact on value) but also decreased prepayment speeds (positive impact on value). There seems to be a general belief that rates will continue to rise.

June's results highlight the offsetting forces that continue to shape MSR valuations. While higher interest rates increased discount rates and created downward pressure on values, they also reduced expected prepayment activity, helping preserve the value of servicing assets. These competing dynamics largely balanced one another, leaving MSR values relatively unchanged from the previous month.

With expectations for additional rate increases, lenders and servicers will continue to monitor both interest rate trends and borrower prepayment behavior as key drivers of MSR performance.