Fannie Mae/Treasury Spread Stabilizes at Higher Level

As of May 21, 2010: Fannie Mae 30 Day Commitment/10 Yr Treasury Spread: 1.18777

Notes: The spread is still historically very low, however, in the wake of the discontinuance to the Federal Reserves MBS Purchase Program on March 31, 2010, the spread has been rising persistently, from a low of 0.85006 on March 24, 2010 (one week before the official ending of the program) to the current spread of 1.18777, on May 21, 2010.

I expect this spread to continue significantly higher throughout the year.

Spread History: 12/03/2007 to 05/21/2010

Spread Average: 1.655390178

2 Std Dev: 0.944344144

U.S. Treasury Issuance May 2010 - $191 Billion

Total New Issuance of 2 Yr, 3 Yr, 5 Yr, 7Yr, 10 Yr, 30 Yr Treasuries for May 2010: $191 B

Total New Treasury Issuances Jan. '09 to May '10 (2 Yr. - 30 Yr Maturitues): $3.023 Trillion

Breakdown by Maturity:

Jan '09 To May '10 Treasury Issuances:

Fannie Mae 30 Yr/10 Yr Treasury Spreads Widening

The recent Greek debt crisis may be doing wonders for the 10 Yr Treasury yields, but it's having very little effect on Fannie Mae 30 Yr mortgage rates. As a result, the spread is widening significantly, to the highest spread level this year.

USDA Loan Activity

A very interesting chart from the USDA Rural Development (Washington) website on annual loan activity for the USDA Rural Development loan program. In the absence of subprime lending, the 100% LTV (102% including funding fee) program is simply exploding.