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Mortgage Rates Decline for Second Consecutive Week: 3 mREITs in Focus
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U.S. mortgage rates declined for the second consecutive week, providing some relief to prospective homebuyers and creating a relatively favorable backdrop for mortgage real estate investment trusts (mREITs). According to Freddie Mac, the average 30-year fixed mortgage rate fell to 6.65% as of Aug. 20, 2026, from 6.67% in the prior week and 6.69% from two weeks earlier. However, it remained above the year-ago level of 6.58%.
The recent moderation in mortgage rates could gradually improve housing affordability and support mortgage origination and refinancing activity. However, borrowing costs remain elevated, keeping affordability pressures intact. Mortgage Bankers Association data showed that refinancing applications rose 2% in the week ended Aug. 14, while overall mortgage applications slipped 0.4% and purchase applications declined 2%. Against this backdrop, investors may want to keep an eye on mREIT stocks such as Ellington Financial Inc. (EFC - Free Report) , Annaly Capital Management (NLY - Free Report) and AGNC Investment (AGNC - Free Report) .
For mREITs, a sustained decline in mortgage rates could improve the investment environment by supporting mortgage-market activity and asset valuations. In particular, tighter spreads in the Agency mortgage-backed securities market could lift mortgage-backed securities (MBS) prices and support book values. At the same time, lower and less volatile rates may ease funding pressures and improve portfolio economics. However, the magnitude of these benefits will depend on the pace of rate declines, funding costs and prepayment activity.
3 Stocks to Keep an Eye on: EFC, NLY & AGNC
Ellington Financial: The company invests in a diverse array of financial assets. These include residential and commercial mortgage loans, and mortgage-backed securities, consumer loans, and asset-backed securities. The assets are supported by consumer loans, collateralized loan obligations, non-mortgage and mortgage-related derivatives, equity investments in loan origination companies, and other investments.
EFC is well-positioned to weather volatility in the mortgage market, supported by its diversified exposure across residential and commercial mortgage loan portfolios and strong momentum in its securitization platform. The company’s loan originations, especially in commercial mortgage bridge loans, proprietary reverse mortgages and closed-end second lien loans, continue to contribute to stable growth and income.
Ellington Financial is actively leveraging dynamic hedging strategies, maintaining a broad and balanced portfolio, securing multiple sources of financing and operating with low leverage. These measures reflect a disciplined approach to risk management and a commitment to preserving book value while adapting to shifting market conditions.
The company also pays out regular dividends. EFC’s dividend yield is 11.5%, and it has raised its dividend once over the past five years.
Annaly: The company's investment strategy is driven by the prudent selection of assets and effective capital allocation to achieve stable returns. Its investment strategy involves traditional Agency mortgage-backed securities (MBS), which provide downside protection, and investments in more non-agency and credit-focused asset classes that enhance returns.
NLY is focusing on improving its capabilities by acquiring newly originated mortgage servicing rights (MSRs) from its partner network, which will continue to provide a strong advantage in expanding its MSR business. Its diversified investment strategy will likely be a key contributor to long-term growth and stability. By diversifying its investments across the mortgage market, the company is better-positioned to capitalize on opportunities as they occur in multiple areas while limiting the risks associated with overexposure to any particular location.
The company also pays out regular dividends. NLY’s dividend yield is 12.9%, and it has raised its dividend twice over the past five years.
Annaly Capital Management Inc Dividend Yield (TTM)
The Zacks Consensus Estimate for 2026 earnings and sales indicates year-over-year increases of 5.8% and 78.9%, respectively. Annaly currently has a Zacks Rank of #2.
AGNC Investment: The company adheres to an active portfolio-management policy, which includes re-evaluation and adjustment of its portfolio, as well as hedges amid a varying interest rate and mortgage market environment. The company is operating in a more defensive position with significant hedge protection due to market volatility. As of June 30, 2026, the company maintained a significant interest rate hedge position, which covered 82% of the outstanding balance of its Investment Securities Repo, TBA position and other debt, after excluding option-based hedges.
AGNC primarily invests in agency mortgage-backed securities. These securities are backed by Fannie Mae, Freddie Mac or Ginnie Mae, reducing credit risks but leaving the company highly exposed to interest rates, MBS spreads, funding costs and prepayment trends.
Higher refinancing activity and a decline in mortgage rates could support AGNC Investment’s performance. Lower mortgage rates, if accompanied by reduced rate volatility, can improve agency MBS valuations, support book value and enhance the relative appeal of AGNC’s mortgage assets.
The company also pays out regular dividends, with NLY currently yielding 13.2%. However, its dividend has been unchanged over the past five years.
The Zacks Consensus Estimate for 2026 earnings and sales indicates year-over-year rallies of 6.7% and 117.7%, respectively. AGNC Investment currently has a Zacks Rank of #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Mortgage Rates Decline for Second Consecutive Week: 3 mREITs in Focus
U.S. mortgage rates declined for the second consecutive week, providing some relief to prospective homebuyers and creating a relatively favorable backdrop for mortgage real estate investment trusts (mREITs). According to Freddie Mac, the average 30-year fixed mortgage rate fell to 6.65% as of Aug. 20, 2026, from 6.67% in the prior week and 6.69% from two weeks earlier. However, it remained above the year-ago level of 6.58%.
The recent moderation in mortgage rates could gradually improve housing affordability and support mortgage origination and refinancing activity. However, borrowing costs remain elevated, keeping affordability pressures intact. Mortgage Bankers Association data showed that refinancing applications rose 2% in the week ended Aug. 14, while overall mortgage applications slipped 0.4% and purchase applications declined 2%. Against this backdrop, investors may want to keep an eye on mREIT stocks such as Ellington Financial Inc. (EFC - Free Report) , Annaly Capital Management (NLY - Free Report) and AGNC Investment (AGNC - Free Report) .
For mREITs, a sustained decline in mortgage rates could improve the investment environment by supporting mortgage-market activity and asset valuations. In particular, tighter spreads in the Agency mortgage-backed securities market could lift mortgage-backed securities (MBS) prices and support book values. At the same time, lower and less volatile rates may ease funding pressures and improve portfolio economics. However, the magnitude of these benefits will depend on the pace of rate declines, funding costs and prepayment activity.
3 Stocks to Keep an Eye on: EFC, NLY & AGNC
Ellington Financial: The company invests in a diverse array of financial assets. These include residential and commercial mortgage loans, and mortgage-backed securities, consumer loans, and asset-backed securities. The assets are supported by consumer loans, collateralized loan obligations, non-mortgage and mortgage-related derivatives, equity investments in loan origination companies, and other investments.
EFC is well-positioned to weather volatility in the mortgage market, supported by its diversified exposure across residential and commercial mortgage loan portfolios and strong momentum in its securitization platform. The company’s loan originations, especially in commercial mortgage bridge loans, proprietary reverse mortgages and closed-end second lien loans, continue to contribute to stable growth and income.
Ellington Financial is actively leveraging dynamic hedging strategies, maintaining a broad and balanced portfolio, securing multiple sources of financing and operating with low leverage. These measures reflect a disciplined approach to risk management and a commitment to preserving book value while adapting to shifting market conditions.
The company also pays out regular dividends. EFC’s dividend yield is 11.5%, and it has raised its dividend once over the past five years.
Ellington Financial Inc. Dividend Yield (TTM)
Ellington Financial Inc. dividend-yield-ttm | Ellington Financial Inc. Quote
The Zacks Consensus Estimate for 2026 earnings and sales indicates year-over-year rallies of 17% and 58.9%, respectively.
It currently has a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Annaly: The company's investment strategy is driven by the prudent selection of assets and effective capital allocation to achieve stable returns. Its investment strategy involves traditional Agency mortgage-backed securities (MBS), which provide downside protection, and investments in more non-agency and credit-focused asset classes that enhance returns.
NLY is focusing on improving its capabilities by acquiring newly originated mortgage servicing rights (MSRs) from its partner network, which will continue to provide a strong advantage in expanding its MSR business. Its diversified investment strategy will likely be a key contributor to long-term growth and stability. By diversifying its investments across the mortgage market, the company is better-positioned to capitalize on opportunities as they occur in multiple areas while limiting the risks associated with overexposure to any particular location.
The company also pays out regular dividends. NLY’s dividend yield is 12.9%, and it has raised its dividend twice over the past five years.
Annaly Capital Management Inc Dividend Yield (TTM)
Annaly Capital Management Inc dividend-yield-ttm | Annaly Capital Management Inc Quote
The Zacks Consensus Estimate for 2026 earnings and sales indicates year-over-year increases of 5.8% and 78.9%, respectively. Annaly currently has a Zacks Rank of #2.
AGNC Investment: The company adheres to an active portfolio-management policy, which includes re-evaluation and adjustment of its portfolio, as well as hedges amid a varying interest rate and mortgage market environment. The company is operating in a more defensive position with significant hedge protection due to market volatility. As of June 30, 2026, the company maintained a significant interest rate hedge position, which covered 82% of the outstanding balance of its Investment Securities Repo, TBA position and other debt, after excluding option-based hedges.
AGNC primarily invests in agency mortgage-backed securities. These securities are backed by Fannie Mae, Freddie Mac or Ginnie Mae, reducing credit risks but leaving the company highly exposed to interest rates, MBS spreads, funding costs and prepayment trends.
Higher refinancing activity and a decline in mortgage rates could support AGNC Investment’s performance. Lower mortgage rates, if accompanied by reduced rate volatility, can improve agency MBS valuations, support book value and enhance the relative appeal of AGNC’s mortgage assets.
The company also pays out regular dividends, with NLY currently yielding 13.2%. However, its dividend has been unchanged over the past five years.
AGNC Investment Corp. Dividend Yield (TTM)
AGNC Investment Corp. dividend-yield-ttm | AGNC Investment Corp. Quote
The Zacks Consensus Estimate for 2026 earnings and sales indicates year-over-year rallies of 6.7% and 117.7%, respectively. AGNC Investment currently has a Zacks Rank of #3 (Hold).