Mortgage rates fell by less than Treasury yields as the gap between them widened

The 30-year fixed mortgage rate has fallen 0.22 percentage point since its October peak, while the 10-year Treasury yield it usually tracks fell 0.34 point over the same weeks, according to Freddie Mac's weekly survey and the US Treasury's daily yield curve (computed). The difference between the two has widened to its largest in more than a year.

Two rates that moved together until October

Freddie Mac's survey put the 30-year rate at 7.18% as of November 5, down from 7.24% a week earlier and up from 6.22% a year before, the agency said. The rate peaked at 7.40% in the surveys of October 8 and October 15, according to Freddie Mac's rate history.

Freddie Mac says its weekly figure is "an average of loan rates offered the prior Thursday through Wednesday." FinanceInTime compared each weekly figure with the average 10-year Treasury yield over the same Thursday-to-Wednesday window, using Treasury's daily par yield curve. The 10-year yield is a market benchmark and the mortgage rate is a survey of lender offers, so the gap between them is a rough guide to what borrowers pay above the government's cost of borrowing, not a lender margin.

On the way up, the two moved almost in step. Between the surveys of September 10 and October 8, the 10-year average rose 0.48 point, from 4.795% to 5.276%, and the mortgage rate rose 0.64 point, from 6.76% to 7.40% (computed).

On the way down, borrowers got about two thirds

From October 8 to November 5, the window average of the 10-year yield fell to 4.936%, a decline of 0.34 point, while the mortgage rate fell 0.22 point to 7.18% (computed). The mortgage rate therefore passed on about 64.7% of the fall in the benchmark (computed).

The gap moved the other way. It was 1.96 percentage points in the survey of September 10 and 2.24 points in both the October 29 and November 5 surveys, a widening of 0.28 point (computed). The last survey with a wider gap was September 11, 2025, when the 30-year rate was 6.35% against a 10-year window average of 4.088% (computed). Early in 2026 the gap had been as narrow as 1.84 points, in the survey of February 5, when the mortgage rate was 6.11% (computed).

Survey	30-year rate	10-year average	Gap
September 10, 2026	6.76%	4.795%	1.96 points
October 8, 2026	7.40%	5.276%	2.12 points
November 5, 2026	7.18%	4.936%	2.24 points

Source: Freddie Mac PMMS; US Treasury daily par yield curve; gap and averages computed by FinanceInTime.

The data do not show why the gap widened. Freddie Mac's release described a backdrop of "strong economic growth" and said rates "continued their downward trajectory" without attributing the move to a cause, as FinanceInTime reported on November 5.

What the gap costs on a typical loan

At 7.18%, a $400,000 30-year fixed loan costs about $2,709.74 a month in principal and interest, against about $2,455.07 at the 6.22% rate of a year earlier, a difference of $254.67 a month (computed with the standard amortization formula).

Had the gap stayed at September's 1.96 points, the November 5 window average of 4.936% would correspond to a mortgage rate of about 6.90% (computed). On the same loan that rate would cost about $2,634.40 a month, or $75.34 less than at 7.18% (computed). That figure is an illustration of the gap's size, not an estimate of where rates would have been.

The inflation report reversed part of the decline

The weekly survey of November 5 predates the October consumer price report. On Tuesday, November 10, the 10-year Treasury yield rose to 4.98% from 4.88% the day before, according to Treasury's daily data (computed). The same day, the average top-tier 30-year fixed rate in Mortgage News Daily's daily index rose to 7.30%.

"When the dust settled, the average top tier 30yr fixed rate was 0.12% higher day over day at 7.30%," Matthew Graham, chief operating officer of Mortgage News Daily, wrote, calling it "the largest one day increase in over a month." He said the report "showed broad-based price pressures."

Before that jump, demand had picked up. Applications to buy a home rose 8% in the week ended November 6 but were 18% lower than a year earlier, according to the Mortgage Bankers Association survey as reported by CNBC.

Prices are adjusting, slowly

The higher rates show up in sales more than in prices. The median US home-sale price fell 0.4% from a year earlier to $388,634 in October, the first decline since May 2023, according to Redfin. Pending home sales fell 3.6% from September on a seasonally adjusted basis, and Redfin said fewer homes went under contract "largely because mortgage rates averaged 7.33%." FinanceInTime covered that report on Wednesday.

Freddie Mac publishes its survey weekly on Thursdays at 12 p.m. ET, so its November 12 release will be the first to include days after the inflation report.

The spread, not the benchmark, is the part to watch

We think the widening gap matters more for buyers this winter than the direction of Treasury yields. Since early October, the benchmark has done most of what would-be buyers hoped for, yet only about two thirds of that decline reached the survey rate, and the inflation report has since pushed the daily rate back to 7.30%.

The threat is that a wide gap combines with yields that stay near 5%: monthly payments on the typical loan would then stay more than $250 above last year's, and pending sales, already at Redfin's lowest outside April 2020 since 2013, would have little reason to recover. The opportunity is the reverse: if the gap narrows back toward the 1.84 to 1.96 points seen earlier in 2026, borrowers could see lower rates even without a further fall in yields.

Our forecast, conditional on the 10-year yield holding between 4.8% and 5%, is that the 30-year rate stays above 7% through the end of the year unless the gap narrows. We would change that view if two or three Freddie Mac surveys show the gap back near 2 points. Regional markets will differ, as Redfin's figures for San Francisco and Austin show.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.