I've seen a few yarn wreaths online, and each is a little different. Here's how I made mine!
*wreath foam (I got mine on the clearance aisle at Hobby Lobby)
*yarn (I had this in my yarn bag, but you could pick this up for a couple dollars)
*2 pins (or glue)
I took the end of the yarn and pinned it to the back of the wreath foam. You could use glue, but I didn't want to wait for it to dry.
I simply starting wrapping the yarn around the foam.
This took FORRRREVVVVERRR because I wrapped each piece exactly next to each other and made sure there were no gaps. An easier way would be to wrap one layer quickly then wrap a second layer on top of that, but that would give you a slightly different look. I did this while watching tv at night, so I was easily distracted :)
Not pictured (because I got too excited at finishing and forgot): When I was back to my starting point, I pinned the end of the yarn to meet up with the first pin. Again, you could use glue instead. I also cut a few strands of yarn and tied them into a bow.
I think it's quite charming!
(The picture in the background is a birthday present I bought myself last July. It's still waiting to be hung up...whoops!)