Mortgage rate predictions through 2030: What to expect
Mortgage rate predictions through 2030: What to expect.
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Mortgage rates have been higher in the last few years. But where are rates headed in the next five years, and should you wait for mortgage rates to fall significantly before buying or refinancing? Mortgage interest rates are determined by several factors , all of which can give us clues about the future. Let's take a closer look at mortgage rate predictions over the next five years.
One of the most useful indicators for predicting mortgage rates is the yield on the 10-year U.S. Treasury note . Mortgage rates and 10-year Treasury yields typically move in the same direction, although mortgage rates are usually higher because lenders factor in additional risks. This difference between the two is known as the spread, and we'll account for that when estimating where mortgage rates could go.
With that in mind, the first step is to look at where economists believe Treasury yields are headed over the next five years. To build a forecast, we'll combine expert economic projections with data compiled using artificial intelligence.
Michael Wolf, a global economist at Deloitte Touche Tohmatsu Ltd., outlined the firm's Treasury yield expectations over the next five years in a December update from the Deloitte Global Economics Research Center .
"We assume the Fed leaves rates unchanged until December 2026. The average federal funds rate reaches its neutral 3.125% in the middle of 2027," he wrote. Wolf said the 10-year Treasury yield will ease gradually through the second quarter of 2027, "to settle at 3.9% from the third quarter of 2027 through the end of 2030."
Other forecasts point to somewhat higher long-term yields. For example, Goldman Sachs analysts expect the 10-year Treasury to rise over the long term to 4.5% by 2035.
Meanwhile, the Congressional Budget Office (CBO) projects that the 10-year Treasury yield will reach 4.1% by the end of 2026, rising gradually to about 4.3% by 2030.
Anthropic's Claude artificial intelligence compiled the predictions into a consensus forecast, which we will utilize below.
Read more: Why mortgage rates increased after the Federal Reserve rate cut
As mentioned, the 10-year Treasury and 30-year fixed mortgage rates are separated by a spread. That difference between the two has been on either side of 2.5 percentage points in recent years. That's a significant change when compared to the spread from 2010 to 2020, when it was under two percentage points — and often near 1.5.
Using a 2-percentage-point spread, here's an example of how Treasurys and mortgage rates compare:
Here's a recent example: As of March 5, the 10-year Treasury yield was 4.09%, and the 30-year fixed mortgage rate was 6.00%. The spread was 6.00 - 4.09 = 1.91 percentage points.
The spread is under two percentage points, which is one reason mortgage rates have decreased.
Claude AI suggested using a variable spread that slowly compressed:
"The spread between 30-year fixed mortgage rates and the 10-year Treasury is driven by prepayment risk, credit risk, and supply/demand for mortgage-backed securities (MBS). The Federal Reserve's quantitative tightening (QT) program widened spreads after 2022 as private markets absorbed more MBS. Spreads have begun normalizing in late 2025 and are expected to continue tightening."
Using these spread estimates, we can now complete our five-year mortgage rate forecast.
Using the Treasury forecast, we add the Claude-suggested base case assumed spread between the bond market and 30-year fixed mortgage rates to compile a five-year forecast:
