Mortgage Spread

The spread between the yields of a 30 year fixed mortgage (as reported by the MBA) and the Ten Year Treasury note has widened steadily over the past year.


Click on graph for larger image.

If the current spread was 145 bps, as in early 2005, the rate on a 30 year mortgage would be about 5.7% today.

Instead, the rate on a 30 year fixed mortgage is 6.15%.

That is a substantial increase in the spread and I'm guessing it indicates investors have become increasingly wary of mortgage backed securities.