T. Rowe Price, Loomis Are Buying MBS That Have Grown Cheap

Money managers including T. Rowe Price Group Inc. are looking for bargains among mortgage bonds after the war in Iran and gyrating bond yields clobbered the securities over the last month.

Notes weakened across the board in March, though mortgage bonds have performed worse than Treasuries for the last few months. Spreads on current coupon mortgage-backed securities, the bonds currently being sold by mortgage lenders, widened to about 1.25 percentage point by March 31, from 0.94 percentage point in late January. In comparison, the average for the last six months is closer to about 1.15 percentage point.