Demand for mortgage servicing rights (MSRs) remained strong in December, according to a market update by Mortgage Capital Trading (MCT), a mortgage capital markets advisory.

MCT noted that aggregators, in particular, kept MSR market values elevated relative to the company’s MSR fair value estimates. MCT forecasts average rates for 30-year fixed-rate mortgages between 5.5% and 6% in 2026.

Through the fourth quarter, aggregators continued to pay above fair value, by MCT’s assessment, for servicing released premiums (SRPs) that allow MSR buyers to acquire both the underlying loan and its servicing rights.

“We anticipate those levels to remain elevated during [the first quarter of] 2026,” the company said. Reflecting the present value of future net servicing income, average SRP levels remain roughly 12 to 20 basis points higher than average fair value.

MCT says that lenders and other MSR originators should use “caution when capitalizing new MSR production at moderate price levels,” given that elevated SRP levels “reflect the aggregator’s economies of scale rather than actual fair value.”

Bulk MSR demand also remains well anchored for “the near future,” with potential consolidation in the MSR market occurring in the first quarter, “to cash in on some of the strong MSR values and mitigate against possible economic uncertainties,” said MCT.

“MSRs continue to offer attractive yields and income for servicers, especially when loan originations volume remains low,” the company added.

Buyers of bulk MSR portfolios are paying a premium to acquire chunks of servicing, paying servicing fee multiples of up to 5.5 times fair market value on conventional paper. Government MSRs with no delinquencies and with interest rates below 5% continue to trade at multiples of 4 times or higher.

More recent conventional loan originations from 2024 and 2025, with higher contract interest rates, are trading at servicing fee multiples between 4 and 4.5 times fair market value. These trends remain in play for now, says MCT, while acknowledging that future economic conditions remain uncertain.

The shorter end of the yield curve for U.S. Treasurys dropped from December to January after the Federal Reserve lowered its benchmark borrowing rate last month, but the long end of the curve remained high, causing the overall yield curve to steepen.

“The current spread between the [two-year] Treasury rate and the [10-year] Treasury rate is on a trajectory that signals the potential for more economic challenges ahead,” MCT concluded.