Annaly Capital Management, Inc. (NLY), ARMOUR Residential REIT, Inc. (ARR), American Capital Agency Corp. (AGNC) : Buy These mREITs Before They Defy Gravity

However, the situation has already started to reverse as mortgage rates increase and the spreads widen. Since the beginning of the year, the 30-year mortgage rate climbed 20 bps, while the 15-year average mortgage rate climbed 10 bps. Besides, the weekly surveys conducted by Mortgage Bankers Association reveal a drop in refinance activity, which will cause further benefit to mortgage REITs.

Conclusion

While members of the FOMC committee are increasing pressure to bring a halt to the Fed’s third round of easing, citing various reasons, I believe such an exit is not in sight until some clarity is reached regarding how Congress approaches the fiscal policy in the coming budget. However, when the easing is brought to an end, mortgage REITs like American Capital Agency Corp. (NASDAQ:AGNC), ARMOUR Residential REIT, Inc. (NYSE:ARR), Annaly Capital Management, Inc. (NYSE:NLY)and CYS Investments Inc (NYSE:CYS) will fly north, defying gravity. Therefore, you should keep an eye on the easing exit decision.

Adnan Khan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.