Fannie Mae’s mortgage-rate outlook hinges on a 10-year Treasury yield that Michael Wolf said could settle at 3.9% from the third quarter of 2027 through the end of 2030. For homebuyers and people considering refinancing, that path points to borrowing costs that may ease from recent highs, but not back to the low-spread period seen before 2020.
3.125% is the neutral federal funds rate Wolf said the Fed reaches in the middle of 2027. In a December update from the Deloitte Global Economics Research Center, he said: "We assume the Fed leaves rates unchanged until December 2026. The average federal funds rate reaches its neutral 3.125% in the middle of 2027," and then said the 10-year Treasury would ease gradually through the second quarter of 2027 before settling lower.
March 5 Rates Above 6.00%
4.09% was the 10-year Treasury yield as of March 5, while the 30-year fixed mortgage rate stood at 6.00%. The 1.91 percentage point spread between them shows how mortgage pricing still carries a premium over Treasury yields, even though the two usually move in the same direction.
2.5 percentage points has been the recent neighborhood for that spread, but it was under two percentage points from 2010 to 2020 and often near 1.5. Claude AI said the gap is driven by prepayment risk, credit risk, and supply and demand for mortgage-backed securities (MBS), a mix that can keep mortgage rates above Treasury yields even when the benchmark moves lower.
Deloitte Versus Goldman Sachs
4.5% is where Goldman Sachs analysts expect the 10-year Treasury to rise by 2035, a higher long-term path than Deloitte’s call. The Congressional Budget Office projects 4.1% by the end of 2026 and about 4.3% by 2030, which places its view closer to Goldman Sachs than to Deloitte’s 3.9% settlement range.
2022 marked the point when the Federal Reserve’s quantitative tightening program widened spreads as private markets absorbed more MBS. Claude AI said spreads began normalizing in late 2025 and are expected to continue tightening, and that tighter gap would matter as much as the Treasury forecast itself for anyone trying to estimate where a 30-year fixed mortgage lands.
Mortgage Costs After 2027
3.9% on the 10-year Treasury does not translate mechanically into a 3.9% mortgage rate. Lenders still add a spread for prepayment risk, credit risk, and MBS demand, so the open question for buyers is how much of that gap survives if the spread keeps compressing after late 2025.
2030 is the endpoint that matters for planning, because Wolf’s forecast implies a long stretch of relative stability in the benchmark that feeds mortgage pricing. Homebuyers and people weighing refinancing will be watching the spread more closely than the Treasury number alone, since that gap will decide how much of the lower yield reaches the monthly payment.
