Mortgage rate predictions for the next 5 years: What experts say.

Core Insights - The article discusses the long-term outlook for mortgage rates following the end of the government shutdown, emphasizing the correlation between mortgage rates and the 10-year Treasury yield [1][2]. Treasury Yield Forecast - Economists predict the 10-year Treasury yield will remain around 4.5% for the remainder of 2023, with a gradual decline to 4.1% by 2027 and remaining stable through 2029 [4][5]. - Goldman Sachs analysts concur with the forecast that the 10-year Treasury yield will stay near 4.1% until 2027 [4]. Mortgage Rate Spread - The spread between the 10-year Treasury yield and 30-year fixed mortgage rates has averaged around 2.5 percentage points in recent years, a significant increase from the under two percentage points observed from 2010 to 2020 [6]. - As of November 14, the 10-year Treasury yield was 4.06%, while the 30-year fixed mortgage rate was 6.24%, resulting in a spread of 2.18 percentage points [6]. AI Insights on Spread - Recent AI analysis suggests a spread of 2.1 to 2.3 percentage points based on historical data, indicating a shift in the mortgage rate landscape [7]. Five-Year Mortgage Rate Forecast - The five-year mortgage rate forecast combines the Treasury yield predictions with the estimated spread, projecting mortgage rates to be around 6.2% to 6.4% by 2027 [11]. Economic Disruptions - The article notes that unforeseen economic events, such as a recession or financial crisis, could significantly alter the mortgage rate outlook [12].