Issuance will be supported by the non-bank RMBS and ABS markets while a return to the long-term average for bank RMBS will likely offset some volume. Pricing is expected to continue tightening across the capital stack, although the degree of margin compression across senior notes may be more subdued than the trend witnessed over the last 18 months with some investors becoming more selective with transaction participation around current pricing levels. RBC anticipates collateral performance will remain stable with the main risk to performance deterioration being the expected rise in unemployment, which RBC forecasts will increase to 4.5% by the end of 2025.
Published February 11, 2025 | 10 min read