08/12/2026
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Mortgage rates aren’t random. They’re affected by 2 numbers.
The 10-year treasury yield and something called "the spread." That's the gap between the 10-year treasury yield and mortgage rates, and it usually sits around 1.76 percentage points.
Back in 2023, the gap in the spread ballooned up to 3.19 in response to economic uncertainty. If it were still that wide today, rates would be pushing almost 8%.
But the good news is the gap has narrowed to 2.01 (a lot closer to the long-term norm). And that’s a big positive for rates. It’s why today’s mortgage rate is in the upper 6s instead of touching 8%.
Here's the part a lot of people miss. Where rates are right now are already pretty close to what a totally normal spread would produce – a mortgage rate around 6.5%.
In other words, the fact that the spread has narrowed in recent years has helped mortgage rates. Sure, they’re...
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