Mortgage spreads keeping housing demand intact for now 

Mortgage spreads are once again playing our friendly neighborhood housing hero by keeping mortgage rates under 7% in a crazy, hectic year. This has allowed housing to stay intact, sales-wise. While sales in our weekly tracker data have slowed down, as they typically do once mortgage rates get above 6.64%, they eked out a small positive year-over-year gain for the second week in a row. In previous years, rates would have already been over 7% months ago with the 10-year yield at this level, and sales trends would easily be negative year-over-year, but mortgage spreads being closer to normal has really helped in 2026. Let’s take a look on why we should all hug a mortgage spread. Mortgage spreads In 2023, mortgage spreads were the villain, rising to over 3%, according to how we track them. The last time that happened was 1986. The Silicon Valley banking crisis and the Fed continuing to raise rates blew the spreads higher in 2023, and mortgage rates would have never reached 8% that year without this happening. In 2026, mortgage spreads have not only gotten better, but they have kept rates under 7% the entire year.Over the last three years, housing has always slows down when rates get ov...