After heavy trading in mortgage-backed securities for the first nine months of the year, a Treasury rally and an uptick in refinancing have helped cool off the market.

The drop in the 10-year-note yield to 5.8% on Oct. 27-the first time this year it had dipped below 6%-ushered in prepayment and supply fears, said Alec Crawford, a mortgage strategist for Morgan Stanley & Co. The high yield on the 10-year security was 6.98% on April 14. Although the downward trend reversed itself late last week, the yield was still 5.91% on Friday.

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