If you’ve been tracking Seattle real estate trends or searching for a house for sale in Seattle, you’ve probably noticed how much mortgage rates have shaped today’s housing market. High rates have kept some buyers on the sidelines, but experts now predict relief is on the horizon. Over the next year, rates are expected to gradually ease — a shift that could bring more balance, opportunity, and confidence back to the market.

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

Mortgage rates typically follow the movement of the 10-year Treasury yield, which reflects investor confidence in the economy. When yields rise, mortgage rates often climb with them. When yields fall, mortgage rates tend to follow suit. This relationship helps explain why we’re finally starting to see signs of a downward trend.

The Spread Is Shrinking

The “spread” — the gap between mortgage rates and Treasury yields — widened during recent years of economic uncertainty. As inflation cools and market volatility declines, that spread is tightening. A smaller spread often signals that lenders feel more confident about long-term stability, which leads to lower borrowing costs for buyers.

The 10-Year Treasury Yield Is Expected To Decline

Many financial forecasters expect Treasury yields to gradually decrease over the next 12 months as inflation continues to stabilize. If that happens, mortgage rates should follow, creating a more favorable environment for both buyers and sellers.

Bottom Line

While no one can predict exact timing, the outlook for 2025 points toward easing rates — a welcome change for those waiting to make a move. Whether you’re planning to buy or sell, staying informed and partnering with a trusted Seattle real estate agent can help you take advantage of these upcoming shifts with confidence.