Wide Spreads Keep Mortgage Rates Above 7%

Bond traders did their part last week. Lenders only did half of theirs.

The average 30-year mortgage rate held at 7.17% on Friday, the lowest since September 22, according to Mortgage News Daily ^[2]. HousingWire analyst Logan Mohtashami says the bigger obstacle to sub-7% rates is now the spread lenders charge over Treasury yields ^[1].

The numbers behind the stall

• Spreads, the gap between mortgage rates and the 10-year Treasury yield, rose to 2.27% last week from 2.23% a week earlier, per HousingWire ^[1].
• Historically, spreads have ranged from 1.60% to 1.80%, so today's gap is wide by long-run standards ^[1].
• Mohtashami estimates the 30-year would be 6.72% at 2026's best spreads and 8.11% at 2023's worst ^[1].
• The 10-year Treasury yield closed the week at 4.86%, even after October payrolls rose by 165,000 ^[3][4].

But steadier rates have not revived buyers yet. HousingWire counted 51,764 weekly pending sales, versus 59,164 in the same week of 2025, a drop of about 12.5% by our math ^[1]. Inventory slipped to 902,740 from 914,833, and 43% of listings carried a price cut, up from 42% a year ago ^[1]. Mohtashami says he would wait for the 10-year yield to break below 4.70% before getting excited about rates ^[1].

What it means for you

By our math, a $300,000, 30-year loan at 7.17% costs about $2,030 a month in principal and interest. At 6.72%, the rate HousingWire ties to this year's best spreads, the payment falls to about $1,940 ^[1]. That is roughly $90 a month, or $1,080 a year, riding on spreads rather than on the Fed.

Zoom out

Mohtashami's data show housing demand tends to grow once rates fall below about 6.64% ^[1]. With this week's inflation reports and Fed speeches ahead, the 10-year yield and spreads together will decide whether rates reach that zone ^[1].