Market Stats
What Does the 10-Year Treasury Have to Do With Mortgage Rates?
By David Golovin · September 29, 2026 · 2 min read
Mortgage rates track the 10-year U.S. Treasury yield, not the Fed funds rate. When bond investors sell Treasuries, yields rise and mortgage rates follow.
Fed funds rate
3.75-4.00%
Set by the Federal Reserve, Sept 2026
30-year fixed mortgage
7.03%
Freddie Mac PMMS, Sept 24, 2026
Avg estimated assumable rate
4.52%
17,931 active listings on Roots
How the spread works
Lenders price 30-year mortgages at a spread above the 10-year Treasury, typically 1.5 to 2.5 percentage points. That spread widens when investors see more economic uncertainty.
Source: Freddie Mac Primary Mortgage Market Survey
One way to skip the cycle
An assumed FHA or VA loan carries the original rate, regardless of where the Treasury trades today. The estimated average on active assumable listings is 4.52%.
FAQ
Why do mortgage rates follow the 10-year Treasury yield?
Mortgage-backed securities compete with Treasury bonds for the same investors. When Treasury yields rise, lenders raise mortgage rates to stay competitive. The spread between the 10-year yield and the 30-year fixed is typically 1.5 to 2.5 percentage points.
Does the Fed directly set mortgage rates?
No. The Fed sets the federal funds rate, which influences short-term borrowing costs. Mortgage rates track the 10-year Treasury yield instead, because mortgages are priced as long-term securities in the bond market.
How can I get a mortgage rate below 7% today?
One path is assuming a seller’s existing FHA or VA loan. Those loans were originated when rates were lower, and the rate stays locked for the life of the loan. Roots shows active assumable listings with an estimated average rate of 4.52%.