Why Experts Say Mortgage Rates Should Ease Over the Next Year

Good news: mortgage rates are finally starting to drop! 🙌
But the big question is — will they keep falling, and how low could they actually go?

Experts say there’s a real chance they’ll come down even more over the next year. One key factor to watch? The 10-year Treasury yield.

📉 The Connection Between Mortgage Rates and the 10-Year Treasury Yield

For over 50 years, mortgage rates have closely followed the movement of the 10-year Treasury yield — a key benchmark for long-term interest rates.

• When the yield goes up, mortgage rates usually rise.

• When the yield goes down, mortgage rates tend to drop.

Normally, there’s a small, steady gap between the two (about 1.76%). That gap is called the spread.

🍂 The Spread Is Finally Shrinking

Over the past few years, that spread has been wider than normal because of economic uncertainty — basically, fear in the market. That’s one reason rates have been higher lately.

But now? That fear is starting to fade. The spread is narrowing again, which is a great sign for homeowners and buyers alike.

As Redfin explains:

“A lower mortgage spread equals lower mortgage rates.”

If that trend continues, rates could drop even more through next year.

📊 What Experts Expect Next

Economists are also forecasting the 10-year Treasury yield to decline in the months ahead.
So when you combine a lower yield and a smaller spread — you get a recipe for even lower mortgage rates in 2026.

Some projections even suggest rates could dip into the upper 5% range by the end of next year.

Of course, there’ll still be some ups and downs along the way as the economy, jobs, and inflation shift — but overall, things are moving in the right direction. 🍁

🏡 Bottom Line

Tracking mortgage rate changes can get confusing — that’s where having a trusted local agent or lender makes all the difference.

They’ll help you make sense of what’s happening and guide you on the best time to make your move.

If you’d like real-time updates or want to plan your next steps before the new year hits, let’s connect.

Finding ways to make your credit score better could help you get a lower mortgage rate. When you’re ready to get the process started, let’s connect.