Will Mortgage Rates Continue to Fall?

One of the most anticipated questions among homebuyers right now is whether mortgage rates will continue to go down. Rates have started to ease recently—but the key question is: Will this trend last, and how much lower can they go?

Experts believe there’s still room for further decline, and a major clue lies in the U.S. 10-year Treasury yield.

📈 The Link Between Treasury Yields and Mortgage Rates

Over the past 50 years, 30-year fixed mortgage rates have closely followed the movement of 10-year Treasury yields.

• When Treasury yields rise, mortgage rates rise.

• When yields drop, mortgage rates tend to fall.

Typically, the spread (the gap between the two rates) averages around 1.76 percentage points. But in recent years, economic uncertainty caused that spread to widen, keeping mortgage rates higher than normal.

Now, the good news is that this gap has started to narrow—signaling a positive shift that could point to lower mortgage rates ahead.

📉 Outlook for 10-Year Treasury Yields

Analysts expect Treasury yields themselves to decline gradually over the coming year.If yields fall and the spread continues to shrink, mortgage rates could ease even further through 2025.Some forecasts suggest that by 2026, rates could settle in the high-5% range.

Of course, factors like inflation, employment, and the broader economy will all influence the pace of change. But based on current trends, we can reasonably expect a slow and steady decline in rates over time.

🏡 What This Means for Chicago Buyers and Sellers

For buyers across Chicago and the suburbs, this is an encouraging sign. Lowering rates open new opportunities to plan for homeownership strategically.

For sellers, this trend also brings optimism—more buyers will likely re-enter the market as affordability improves, increasing the chances of successful transactions.

💡 Bottom Line

Mortgage rates are closely tied to Treasury yields, and recent movements indicate a hopeful trajectory. While short-term fluctuations will continue, the long-term outlook points toward greater stability and potential rate relief.

If you’re considering buying or selling, now is the time to start planning your next move with a professional who understands how to align your strategy with these shifting market trends.

📞 Hansangcheol (한상철) | Chicago Real Estate773-717-2227 | ChicagoBDB@gmail.com