Mortgage Rates Are Finally Easing—But Will It Last?

You’ve probably noticed—mortgage rates have finally started to come down. 🙌 But the big question is… will they stay that way?

Experts say there’s still room for rates to fall even more over the next year. One key thing to watch? The 10-year Treasury yield it’s been one of the strongest indicators of where mortgage rates are headed for over 50 years.

The Link Between Mortgage Rates and the 10-Year Treasury Yield
For decades, mortgage rates have moved in sync with the 10-year Treasury yield.

• When the yield climbs, rates rise.

• When it falls, rates typically come down.

(See chart below: The historical relationship between mortgage rates and the 10-year Treasury yield.)

But here’s where things get interesting...

The Spread Is Shrinking
The “spread” (the gap between mortgage rates and the 10-year yield) has been unusually wide in recent years due to economic uncertainty. Think of it as a “fear gap.”

Now that uncertainty is easing, the spread is narrowing again—creating space for mortgage rates to drop even further.
(See image below: The spread between the 10-year Treasury yield and mortgage rates is tightening.)

What Experts Expect Next
Economists also forecast that the 10-year Treasury yield itself will decline in the months ahead. Combine that with a smaller spread, and it sets the stage for even lower mortgage rates heading into 2026.

If the trend continues, we could see rates dip into the upper 5% range by the end of next year.

What This Means for You
If you’ve been waiting for rates to come down before buying or refinancing, you might be getting closer to your moment. Just remember—markets shift fast, and small changes can make a big difference in affordability.

Bottom Line
The outlook for 2026 points to a gradual decline in mortgage rates—and we’re already seeing the first signs.

👉 Stay informed and ahead of the market. Reach out to your trusted real estate agent or lender (that’s me!) for real-time updates and guidance on your next move.