> ## Content Index > Fetch the complete content index at: https://www.leadlagreport.com/llms.txt > Use this file to discover other available public pages before exploring further. # Mortgage Rates Hit 7.4%. The 10-Year Did Most of It. - URL: https://www.leadlagreport.com/mortgage-rates-hit-7-4-the-10-year-did-most-of-it/ - Published: 2026-10-22T13:00:00.000Z - Updated: 2026-10-22T12:59:59.000Z - Description: The mortgage rate rose 113 basis points in a year and the 10-year yield rose 115, so the gap barely changed. Over the last five weeks, half the jump was spread. - Author: Michael A. 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Services are offered to financial advisors and are not a solicitation to retail investors.* --- # Mortgage Rates Hit 7.4%. The 10-Year Did Most of It. ### Over the past year, the gap between the mortgage rate and the Treasury yield barely changed. Over the past five weeks, it widened, and home sales have not moved in 13 months. The 30-year fixed mortgage rate was 7.40% in the week of October 15, the highest reading of 2026\. A year earlier it was 6.27%, and the 2026 low was 5.98% on February 26.\[1\] The easy explanation is the lenders. Banks widen their margins when they are nervous, and a 7.4% rate sounds like a margin story. The data say otherwise, at least for the year as a whole. ## The Treasury did the work Mortgage rates track the 10-year Treasury yield because lenders price loans off the cost of long-term money. The weekly Freddie Mac survey covers Monday through Wednesday, so the fair comparison is the 10-year yield averaged over the same week.\[1\]\[2\] On that basis the 10-year averaged 4.03% in the week of October 16, 2025 and 5.19% in the week of October 15, 2026, a rise of 115 basis points. The mortgage rate rose 113\. The gap between them was 2.24 percentage points a year ago and is about 2.2 points now.\[1\]\[2\] Over twelve months, lenders did not take a larger cut. The Treasury market moved the whole rate. ![Mortgage rate and 10-year Treasury yield, Sep 2025 to Oct 2026](https://storage.ghost.io/c/b8/9e/b89e006c-adc9-4384-b804-e802e23b544e/content/images/2026/10/chart_1_rates_20261022.png) ## The last five weeks look different The shorter window tells a more nuanced story. From the week of September 10 to the week of October 15, the mortgage rate went from 6.76% to 7.40%, up 64 basis points. The 10-year average went from 4.84% to 5.19%, up 35\. The gap went from 1.92 to about 2.2, which accounts for the other 30 or so.\[1\]\[2\] So the most recent jump is half Treasury and half spread. That matters because the two have different causes. A Treasury move reflects growth, inflation expectations and Fed policy. A spread move reflects the cost and risk of holding mortgages, including how fast rates are moving. Context helps. Since 2000 the average gap has been about 1.9 points, and from 2010 to 2019 it averaged 1.69\. In 2023 it averaged 2.85 and touched 3.10 in June.\[1\]\[2\] Today's gap is wider than the pre-2020 norm and well below the 2023 peak. It is not an emergency, and it is not normal. A spread that widens while yields climb is how a rate gets to 7.4% faster than the Treasury market alone would explain. It also tends to narrow again when yields stop moving, which is the part to watch if the 10-year steadies. ![Mortgage rate minus 10-year yield, 2000 to 2026](https://storage.ghost.io/c/b8/9e/b89e006c-adc9-4384-b804-e802e23b544e/content/images/2026/10/chart_2_spread_20261022.png) ## What it does to a payment Take a $400,000 home with 20% down, which means a $320,000 loan. At 6.27%, the principal and interest payment is $1,974 a month. At 7.40% it is $2,216, which is $242 more, or 12.3%, which is $2,904 more over a year. Against the February low of 5.98%, which implies a $1,914 payment, the increase is $302, or 15.8%.\[1\] The figures are my calculations from the standard 30-year amortization formula and exclude taxes and insurance. ## The market has stopped moving Existing home sales ran at a 3.99 million annual rate in September, versus 4.08 million a year earlier, a decline of 2.2%.\[3\] The more telling number is the range. For 13 months, monthly sales have stayed between 3.93 million and 4.27 million.\[3\] Rates moved more than a full percentage point and volume barely noticed. Prices are not clearing the market either. The S&P Case-Shiller U.S. National Home Price Index was up 1.9% in the year to July.\[4\] Housing starts were 1.221 million in September, 7.4% below a year earlier.\[5\] Neither buyers nor sellers are moving, and builders are not adding supply to fill the gap. ![Existing home sales, Sep 2025 to Sep 2026](https://storage.ghost.io/c/b8/9e/b89e006c-adc9-4384-b804-e802e23b544e/content/images/2026/10/chart_3_sales_20261022.png) ## What to watch If the spread stays near 2.2 points, the mortgage rate follows the 10-year almost mechanically. At a 10-year yield of 5.1%, that means a mortgage rate near 7.3%. Even a full return to the 1.69 pre-2020 gap would leave the rate near 6.8%. That arithmetic is the point. For the housing market to unlock, the 10-year has to come down. A narrower spread alone will not do it. **This post is for informational purposes only and is not investment advice. Past performance is no guarantee of future results.** \* \* \* ## Notes \[1\] 30-Year Fixed Rate Mortgage Average in the United States, Freddie Mac via FRED, series MORTGAGE30US: [https://fred.stlouisfed.org/series/MORTGAGE30US](https://fred.stlouisfed.org/series/MORTGAGE30US?ref=leadlagreport.com). 7.40% (Oct 15, 2026; also Oct 8), 6.27% (Oct 16, 2025), 5.98% (Feb 26, 2026), 6.76% (Sep 10, 2026). Payment figures are my calculations: $320,000 loan, 360 months, principal and interest only. \[2\] Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, FRED series DGS10: [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10?ref=leadlagreport.com). Weekly averages (Wednesday to Thursday weeks) from daily values: 4.03% (week of Oct 16, 2025), 4.84% (week of Sep 10, 2026), 5.19% (week of Oct 15, 2026). Gap averages are my calculations from weekly data: 1.69 (2010 to 2019), 2.85 (2023), 3.10 peak (Jun 2023). \[3\] Existing Home Sales, National Association of Realtors via FRED, series EXHOSLUSM495S: [https://fred.stlouisfed.org/series/EXHOSLUSM495S](https://fred.stlouisfed.org/series/EXHOSLUSM495S?ref=leadlagreport.com). 3,990,000 (Sep 2026), 4,080,000 (Sep 2025), 13-month range 3,930,000 (Aug 2026) to 4,270,000 (Dec 2025). \[4\] S&P Case-Shiller U.S. National Home Price Index, FRED series CSUSHPINSA: [https://fred.stlouisfed.org/series/CSUSHPINSA](https://fred.stlouisfed.org/series/CSUSHPINSA?ref=leadlagreport.com). 337.306 (Jul 2026), up 1.93% from Jul 2025. \[5\] Housing Starts: Total New Privately Owned Housing Units Started, U.S. Census Bureau via FRED, series HOUST: [https://fred.stlouisfed.org/series/HOUST](https://fred.stlouisfed.org/series/HOUST?ref=leadlagreport.com). 1,221 thousand (Sep 2026), down 7.4% from Sep 2025. 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