U.S. mortgage funds see highest inflows in a year in January

By Patturaja Murugaboopathy

(Reuters) - Money flows into U.S. mortgage funds climbed to a 1-year high in January, according to Refinitiv data, bolstered by lower interest rates and hopes of a faster economic recovery and monetary easing measures.

Data from Refinitiv Lipper showed U.S. mortgage funds, which include mutual funds and ETFs, attracted an inflow of $3.6 billion last month, the highest in 12 months.

Flows into mortgage funds https://fingfx.thomsonreuters.com/gfx/mkt/dgkplkoqlvb/flows%20into%20mortgage%20funds.jpg

January's higher money flows came as U.S. construction spending raced to a record high in the prior month, powered by historically low mortgage rates.

iShares MBS ETF and Vanguard Mortgage-Backed Index fund ETF led the inflows, seeing $1.02 billion and $634 million respectively, last month.

Mortgage funds with higher inflows in Jan https://fingfx.thomsonreuters.com/gfx/mkt/nmopaogbwpa/mortgage%20funds.jpg

The interest rates on 30-year mortgages was at 2.95% on Wednesday, near the record-low of 2.86% touched in late December.

Mortgage rate https://fingfx.thomsonreuters.com/gfx/mkt/yzdpxgzjavx/mortgage%20rate.jpg

The outlook for major global housing markets is brighter than previously thought due to expectations for a broad based economic recovery and easy monetary policy, with only a low risk that a COVID-19 resurgence will derail activity, Reuters polls showed on Wednesday.

(Reporting By Patturaja Murugaboopathy)

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