MSR values continued to inch up as market rates eased, offering modest support to servicing portfolios. The gradual decline in rates has provided some lift to valuations, though the pace of improvement remains measured.

Prepay speeds tell a more nuanced story. Speeds picked up for above market coupons, where borrowers continue to find incentive to refinance or restructure, taking advantage of slightly lower rates. However, prepay speeds dropped a bit on current, newly originated, and lower-coupon loans, where borrowers have less motivation to move.

The divergence in prepayment behavior reflects the market’s current balancing act — a softer rate environment bringing selective activity without a broad-based surge. As investors and servicers watch for further rate movement, these subtle shifts in prepay dynamics will continue to shape MSR performance in the weeks ahead.