Why Experts Expect Mortgage Rates To Ease in 2026
You’ve probably noticed — mortgage rates have finally started to dip. But the question on every buyer’s mind is: Will it last? And how much lower can they go?
Industry experts are optimistic. Current data shows that rates may continue trending downward through next year — and one of the key indicators driving this outlook is the 10-year Treasury yield.
The Connection Between Mortgage Rates and the 10-Year Treasury Yield
For more than five decades, the 30-year fixed mortgage rate has closely followed the movement of the 10-year Treasury yield — a key benchmark for long-term interest rates.
When the Treasury yield rises, mortgage rates tend to climb. When it falls, mortgage rates usually follow.
The relationship between the two has been so consistent that experts use something called the spread — the difference between them — to gauge rate trends. Historically, that spread averages around 1.76 percentage points (or 176 basis points).
The Good News: The Spread Is Shrinking
Over the past few years, the spread widened due to economic uncertainty — a reflection of “market fear.” That uncertainty kept mortgage rates higher than usual.
Now, there’s reason to feel encouraged. As market confidence improves, the spread has begun to narrow — signaling the potential for lower mortgage rates ahead.
As Redfin recently noted:
“A lower mortgage spread equals lower mortgage rates. If the spread continues to decline, mortgage rates could fall more than they already have.”
Forecast: The 10-Year Treasury Yield May Decline Further
The yield itself is also expected to decrease in the coming months. When you combine a shrinking spread with a lower yield, both forces point toward continued easing in mortgage rates through 2026.
If the current yield sits around 4.09% and the average spread returns to 1.76%, that suggests potential mortgage rates near 5.85% — possibly even dipping into the high 5s by late 2026, depending on economic trends.
Of course, fluctuations in the economy, employment, and inflation will continue to influence these projections. But overall, the outlook for 2026 remains optimistic and stable — a positive sign for both buyers and investors.
Bottom Line
Mortgage rates are moving in the right direction — and informed strategy matters more than ever.
At The Ali Group, we track these market shifts in real time to help our clients make confident, data-backed decisions. Whether you’re planning to buy, sell, or invest in Vancouver, having a trusted team by your side ensures you move with clarity and purpose.
Connect with us today to receive personalized updates and insights tailored to your real estate goals.
Imran Ali
The Ali Group
📧 [email protected]
📞 604-616-555
