The Federal Reserve’s first 2025 rate cut has sparked interest in where mortgage rates are headed. Factors like the 10-year Treasury yield play a key role. Deloitte’s Michael Wolf predicts a 4.5% yield this year, dropping to 4.1% by 2027. Current trends suggest a stable 4.1% yield through 2029.

The spread between Treasury yields and mortgage rates has historically been around 2.5 percentage points. Using this spread, we can forecast mortgage rates over the next five years. Despite current stability, unforeseen events like a recession or policy changes could alter these predictions.

While a 3% mortgage rate isn’t on the horizon, 2027 mortgage rates are expected to be around 6.2% to 6.4%. If you’re considering an adjustable-rate mortgage, factor in how long you plan to stay in your home. Long-term forecasting can help you choose the best initial term for your budget.

Read more at Yahoo Finance: Projected mortgage interest rates for the next 5 years