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.

Mortgage Spread Update

I will agree that following the Fannie Mae/10 Yr Treasury is a bit like watching paint dry...But we are seeing a bit of an uptick in the spread at the end of this past week.

Key Metrics as of April 16, 2010:

30 Day FNMA Mandatory Commitment: 4.80205%

10 Yr Treasury Yield: 3.77%

Current Spread: 1.03205%

Mortgage Spread Update

Mortgage rates are moving higher, but that's because of the underlying move higher in 10 Yr Treasury rates at this point. The spread between the Mortgage Backed Securities and the 10 Yr has remained relatively constant in the last few weeks.

Treasury Issuances January 5 2009 thru April 1 2010

You can find the Treasury Auction Announcements here.

I've been accumulating the results of the 2 Yr, 3 Yr, 5 Yr, 7 Yr, 10 Yr, and 30 Yr US Treasury Auction Results since the January 5 2009 auction announcement. For the period of January 5, 2009 through the most recent announcement on April 1, 2010, the Treasury has issued $2.714 Trillion in new debt.

Total Treasury Issuance Jan 2010 Through April 1, 2010 Announcement: $657 Billion.
Total Treasury Issuance for 2009: $2.057 Trillion
Total 2009 Issuance Thru 1st Auction in April: $491 Billion

The Treasury has issued 33.8% more debt (counting only the 2 Yr, 3 Yr, 5 Yr, 7 Yr, 10 Yr, and 30 Yr issuances) in 2010 verus 2009.