Why Experts Expect Mortgage Rates To Drop in the Coming Year

Mortgage rates have finally started to ease—and experts believe they could keep heading lower over the next year. The key factor to watch? The 10-year Treasury yield, a reliable indicator that’s closely tied to mortgage rate trends.

The Connection

For decades, 30-year mortgage rates have followed the path of the 10-year Treasury yield. When the yield rises, so do rates—and when it falls, rates tend to dip.

The Spread Is Narrowing

Lately, the gap (or “spread”) between the two has been unusually wide due to market uncertainty. But that spread is now shrinking as confidence improves—an encouraging sign that rates could continue to ease.

With experts forecasting the 10-year Treasury yield to decline further, we could see mortgage rates potentially fall into the upper 5% range by late next year. Of course, this depends on how the economy, inflation, and job market evolve.

While no one can predict exact numbers, the overall outlook points to gradually lower mortgage rates through 2026. Staying informed with a trusted agent or lender will help you time your next move wisely.