On this week’s Convexity Pulse, Kirill Krylov and Steven Scheerer discuss long term trends in the evolution of the Bloomberg Agg’s composition, leading to a higher share of Treasuries, at the expense of MBS. They highlight some striking stats regarding housing affordability and how weaker home sales, combined with higher rates, has translated into lower MBS supply. With 15yr MBS supply shrinking over the last few years, the sector has performed well, and both agree that inefficiencies in loan balance distributions of 15yr pools can be a convexity enhancing feature.