Core Insights - The Federal Reserve is expected to cut interest rates, impacting mortgage rates in the long term [1] - Mortgage rates are closely linked to the 10-year Treasury yield, which is projected to remain stable over the next five years [2][4] - The spread between the 10-year Treasury yield and 30-year fixed mortgage rates has increased significantly in recent years [6] Treasury Yield Forecast - Economists predict the 10-year Treasury yield will stay around 4.5% for the remainder of 2023, declining to 4.1% by 2027 [4][5] - Goldman Sachs analysts concur with the forecast of a stable 10-year Treasury yield near 4.1% through 2027 [4] Mortgage Rate Spread - The historical spread between the 10-year Treasury yield and mortgage rates has been around 2.5 percentage points recently, compared to under 2 percentage points from 2010 to 2020 [6] - As of September 24, the 10-year Treasury yield was 4.16%, with a corresponding 30-year fixed mortgage rate of 6.3%, resulting in a spread of 2.14 percentage points [6] Five-Year Mortgage Rate Forecast - The five-year mortgage rate forecast estimates rates to be around 6.2% to 6.4% by 2027, based on the projected Treasury yields and historical spread [9] - Significant economic disruptions could alter these long-term predictions, but no forecasts suggest a return to 3% mortgage rates in the next five years [8][10]