The jump in issuance of securitized mortgages that Ginnie guarantees returns new business activity to a pace last seen during the year policymakers began raising short-term rates. Those rates have stabilized and are on track to eventually fall. Mortgage rates trended lower in July.

Some of the mortgages that Ginnie securitizations helped to fund in conjunction with other government agencies and private companies involved refinancing. That activity picked up notably during the month, but the majority or 76% of the loans involved were for new home purchases.

Although refinancing activity notably increased recently, mortgage rates still look high to a large number of outstanding borrowers who got loans with record-low financing costs during the pandemic that started in 2020.

July's government lending, which Ginnie supported through securitization guarantees and other agencies provided backing for at the loan level, helped support over 119,000 households in total. Within that total were more than 61,000 first-time buyers.

When runoff is removed from the equation, Ginnie's portfolio experienced $15.5 billion in net growth during the month, boosting the amount outstanding to $2.62 trillion.

One potential source of future issuance growth on an incremental basis could come from Home Equity Conversion Mortgage securitizations if a new loan pooling option that the agency has floated moves ahead and gains traction, but volume in this category has been low to date.

HMBS issuance totaled just $450 million in July compared to a $518 million the same month a year earlier and $497 million in June.

"Once implemented, HMBS 2.0 should increase HMBS issuance substantially by financing most mandatory buyouts, which were just under $500 million last month," Michael McCully and Joe Kelly, partners at consultancy New View Advisors, said in a report citing Recursion figures.

Another pending Ginnie Mae development that some analysts have said could have an impact on issuance going forward is a nonbank risk-based capital rule designed to mitigate servicing risk. That rule is on track to go into effect at the end of this year.

Some mortgage companies have had mixed reactions to the rule in the past, with some like Ocwen (recently rebranded as Onity) voicing concerns with it but others like Pennymac showing readiness. 

Independent analyst, investor and NMN columnist Chris Whalen recently said that the rule could change the mix of Ginnie issuers producing new MBS.

"Most larger issuers have figured out how to comply, but many smaller IMBs could be driven out of business by the new rule," Whalen said in an NMN column published earlier this year.

Ginnie has encouraged issuers who have concern about the rule to reach out to the agency for guidance.