Home Sweet Home
You want mortgage rates to fall, and the good news is they’ve started to. The big questions are whether the trend will last and how much further they might go down. Experts believe there’s still room for improvement, and one of the key things to watch is the 10-year treasury yield. For more than 50 years, the 30-year fixed mortgage rate has closely mirrored its movements. When the yield rises, mortgage rates climb. When it falls, mortgage rates tend to ease. This relationship has been so steady that analysts track the average difference, or spread, between the two, which normally sits at about 1.76 percentage points. In recent years, that spread has been much larger than normal, reflecting uncertainty in the economy. A wide spread signals fear in the market and has helped keep mortgage rates elevated. Recently, though, the spread has begun to shrink. While questions remain about the broader economy, the shrinking spread is a positive sign. Historically, a smaller spread translates into lower mortgage rates, and if that trend continues, rates could fall further.
The 10-year treasury yield itself is also projected to decline, adding another downward force. Combine a declining yield with a narrowing spread and you have a strong case for lower rates ahead. Some experts suggest that under the right conditions, rates could dip into the upper 5 percent range before the end of 2026. With the yield at about 4.09 percent, adding the average spread of 1.76 percent would put mortgage rates near 5.85 percent. Forecasts are never guarantees, since mortgage rates respond to inflation, the job market, and overall growth. There will likely be bumps along the way, even if the long-term trend points lower. Still, the direction now looks encouraging. If you’re considering a move or planning to refinance, having a trusted real estate professional or lender watching these shifts can help you make the most of the opportunities ahead.
Submitted by Christie Giannetto, REALTOR®, ΓEAL Broker
REACH OUT TODAY! The consultation is always FREE and without obligation. You should know what your home is worth in today’s market! Christie Giannetto | REALTOR ® Christie@AZLifestyleTeam.com SurpriseMatters.com
602.740.2313
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