Agency spreads end the week unchanged; Fannie Mae prices $5.5 billion 1.625% Benchmark Notes

By Lisa Kerner

Charlotte, N.C., Sept. 24 - Agency spreads for the most part remained relatively unchanged on Friday, except for the long end that was "maybe 1 basis point wider," a source said.

Fannie Mae priced $5.5 billion of 1.625% five-year Benchmark Notes on Friday at a spread of 36 basis points over Treasuries.

The notes priced at 99.555 to yield 1.717%.

Pricing matched talk for a spread of 36 bps over Treasuries.

Aside from the Fannie Mae offering, the day was relatively quiet, a contrast to earlier in the week when there was a lot of activity after the Federal Open Market Committee meeting.

The FOMC said it would leave the federal funds target rate at the current low of 0% to 0.25% for an extended period.

Things died down "really quickly" when the new home sales report came out Friday morning, the source said.

Sales of new single-family houses in August 2010 were at a seasonally adjusted annual rate of 288,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.

That figure is unchanged from July and almost 29% below the August 2009 estimated figure of 405,000.

In August the median sales price of new houses sold was $204,700; the average sales price was $248,800.

The seasonally adjusted estimate of new houses for sale at the end of August was 206,000, representing a supply of 8.6 months at the current sales rate, the government news release said.

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