Deloitte says the 10-year Treasury yield should drift lower for the next two years before settling at 3.9% from the third quarter of 2027 through the end of 2030, a forecast that could shape Mortgage costs for years. Michael Wolf, who laid out the outlook, said the Federal Reserve will keep rates unchanged until December 2026 and that the average federal funds rate reaches its neutral 3.125% in the middle of 2027.
That matters because Mortgage rates usually move in the same direction as the 10-year Treasury yield, even if they run higher because lenders add risk to the spread. When homebuyers search for where borrowing costs may go next, they are really looking for a path in Treasury yields, and Wolf’s forecast gives one of the clearest long-range markers in the market.
As of March 5, the 10-year Treasury yield was 4.09% and the 30-year fixed Mortgage rate was 6.00%, leaving a spread of 1.91 percentage points. That gap has been narrower and wider at different times: from 2010 to 2020 it was under two percentage points and often near 1.5, while in recent years it has been on either side of 2.5 percentage points. The wider spread is one reason Mortgage rates can stay elevated even when Treasury yields stop climbing, and it is why borrowers who have followed moves in Mortgage Interest Rates Rise to 6.52% as Fed Hike Bets Return have learned not to treat Treasuries as a perfect match for their loans.
Claude AI described the spread as a mix of prepayment risk, credit risk and supply and demand for Mortgage-backed securities, adding that the Federal Reserve’s quantitative tightening program widened spreads after 2022 as private markets absorbed more of those securities. It also said spreads began normalizing in late 2025 and are expected to keep tightening, a sign that Mortgage rates could ease faster than Treasury yields alone would suggest if that trend continues.
Wolf’s view is not the only long-range estimate in the market. Goldman Sachs expects the 10-year Treasury to rise to 4.5% by 2035, higher than Deloitte’s 3.9% call through 2030, while the Congressional Budget Office projects 4.1% by the end of 2026 and about 4.3% by 2030. Those forecasts point to a Treasury market that may stay firm rather than fall sharply, which would limit how much relief borrowers see even if Mortgage spreads keep tightening.
The next benchmark in Wolf’s timeline comes in December 2026, when he assumes the Fed is still on hold. If that view holds, the market’s focus will shift to whether Treasury yields ease fast enough in 2027 to pull Mortgage rates down in a way homebuyers can feel, or whether the spread keeps most of the benefit out of reach.
