Still A Large Spread Between Treasury Yield And Mortgage Rates

The Federal Housing Finance Agency is on CNBC talking about the US mortgage market.  He says that there is still a very large spread between Treasuries and Mortgages.  He commented that the yield declines in mortgages will be helped.

The chart below shows the weekly average 30-year mortgage, the 30-year treasury yield and the spread between 30-year mortgage and 30-year treasury (green line).  The green line has been moving higher which indicates the credit spread added on to consumers.

In other words, the lower rates are not being funneled to the consumer.  Housing remains the biggest problem in the US and until the supply comes down, the economy will continue to falter as house prices will continue to fall.

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