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Mortgage rates may struggle to top 7% as spreads improve

HousingWire says the base mortgage-rate range is now 6.5% to 6.75%, and that even a worse Iran conflict likely would not push mortgage rates far above prior peaks.

Reported · Written up by our desk · Mortgages

HousingWire argues it will be difficult for mortgage rates to reach and sustain levels above 7%, pointing to improved mortgage spreads and a new “base” range for rates.

The outlet links recent upward pressure on borrowing costs to renewed Iran conflict headlines that pushed the 10-year Treasury yield back to about 4.6%, including a move after the U.S. renewed bombing of Iran. It notes this return to 4.6% mirrored earlier episodes during the year when traders sold on Iran-related headlines.

HousingWire says the prior view for 2026, which called for 10-year yields of 3.8% to 4.6% and mortgage rates of 5.75% to 6.75%, proved incorrect for the year, with the 10-year yield reaching around 4.6% due to the Iran-driven bond market shift rather than the broader economic data used in its earlier forecast.

Instead, the article sets mortgage rates at “base” levels of 6.5% to 6.75% and a base 10-year yield range of 4.46% to 4.48%. It adds that if the Iran conflict worsens, rates would need both a more hawkish Fed and firmer economic data to rise further, and even then improved mortgage spreads may limit additional upside to roughly 0.375% to 0.437% above the prior forecast peak of 6.75%.

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