Celebrating 250 Years of Adam Smith with the Invisible Hand of PIWs

Kirill Krylov and Steven Scheerer review February’s prepayment report and explain why refinancing activity is increasingly concentrated in the higher coupons of the stack as modest rate rallies begin to test refinance thresholds. They then explore the growing importance of appraisal waivers, or Property Inspection Waivers (PIWs), and how removing the traditional appraisal bottleneck is subtly changing refinance friction and convexity dynamics across mortgage pools. The episode closes with a look at the “hidden” side of housing affordability, where rising property taxes and insurance costs are quietly consuming a larger share of the monthly mortgage payment.