Why Experts Predict Mortgage Rates Will Ease in 2026

Why Experts Predict Mortgage Rates Will Ease in 2026

Mortgage Rates Are Beginning To Ease – Will It Continue?

If you’ve been waiting for a better time to buy a home in Sarasota, Lakewood Ranch, or Southwest Florida, there’s good news on the horizon. Mortgage rates, which have been elevated over the past few years, are finally showing signs of easing. But will this downward trend continue — and how much lower could they go?

Experts believe there’s still room for mortgage rates to fall throughout 2025 and into 2026. One of the most reliable indicators to watch is the 10-Year Treasury Yield — and understanding this connection can help local buyers make smarter moves.

The Connection Between Mortgage Rates and the 10-Year Treasury Yield

For over 50 years, the 30-year fixed mortgage rate has closely followed the movement of the 10-year Treasury yield, a benchmark for long-term interest rates.

When the Treasury yield rises, mortgage rates tend to increase. When it falls, mortgage rates generally decline. This correlation has been consistent for decades, and experts use it to gauge future mortgage trends.

Typically, there’s a spread — or gap — between the two, averaging 1.76 percentage points (176 basis points).

The Spread Is Shrinking — A Positive Sign for Buyers

In recent years, that spread has widened due to market uncertainty and economic volatility, leading to higher mortgage rates across Sarasota, Manatee, and Charlotte Counties.

But now, there’s a shift happening. As the economy stabilizes, the spread is beginning to narrow, signaling more confidence in the housing market and paving the way for lower mortgage rates.

According to a recent Redfin report:

“A lower mortgage spread equals lower mortgage rates. If the spread continues to decline, mortgage rates could fall more than they already have.”

This is encouraging news for local buyers seeking homes in Lakewood Ranch, Sarasota, or along the Gulf Coast.

The 10-Year Treasury Yield Is Expected to Decline

It’s not just the spread that’s changing — the 10-year Treasury yield itself is projected to trend downward through the next year.

When you combine a lower Treasury yield with a narrowing spread, you get two powerful forces driving mortgage rates lower — potentially into the upper 5% range by late 2026.

For example, with the 10-year Treasury yield currently around 4.09%, adding the average spread of 1.76% suggests mortgage rates could hover near 5.85%.

Of course, these projections depend on several factors — including inflation, job market strength, and Federal Reserve policy. But overall, the outlook is promising for Florida’s housing markets.

What This Means for Sarasota and Lakewood Ranch Homebuyers

If you’re planning to buy a new home in Lakewood Ranch, invest in Sarasota real estate, or relocate within Southwest Florida, falling mortgage rates could significantly increase your buying power.

As rates ease, more inventory may come online, and affordability could improve — creating new opportunities across Sarasota, Manatee, and Charlotte Counties.

However, timing the market perfectly is difficult. Working with an experienced local real estate professional ensures you stay ahead of market trends and get personalized advice based on your goals.

Bottom Line

While mortgage rates won’t drop overnight, the trend toward lower rates is taking shape — and that’s a promising sign for homebuyers in Sarasota, Lakewood Ranch, and beyond.

If you’re considering purchasing or refinancing a home, now’s the time to start preparing so you’re ready to take advantage of better rates when they arrive.

Connect with Darren Dowling at Beyond Realty to stay updated on mortgage trends, local market insights, and new construction opportunities in Sarasota, Manatee, and Charlotte Counties.

Let’s plan your next move together — and turn today’s insights into tomorrow’s dream home.