Here’s Why Mortgage Rates Are What They Are Right Now (And What It Means for Greater Phoenix Buyers)

If you’re waiting for mortgage rates to fall a lot before you buy in the Valley, you may be waiting a while. But before you get discouraged, there’s a number working behind the scenes that’s actually good for you right now. It’s called the spread, and once you understand it, you may see today’s rates in a whole new light, especially if you’re shopping in Gilbert, Chandler, Queen Creek, or anywhere else across Maricopa County.

The Pattern That’s Held for 50+ Years

For starters, mortgage rates don’t move on their own. They tend to follow the 10-year treasury yield, a number tied to how investors feel about the economy.

It’s not an exact science, since plenty of other factors can move it day to day, but broadly speaking, when the economy looks strong, that yield tends to climb over time. When the outlook gets shaky, it tends to ease. For over 50 years, the 10-year treasury yield and mortgage rates have moved almost in lockstep.

The gap between them is called the “spread.” On average, that gap runs about 1.76 percentage points. That spread impacts your mortgage rate directly. A wider spread tends to push mortgage rates higher than the treasury yield alone would suggest, while a narrower spread keeps rates closer to the treasury yield.

One of the Big Reasons Rates Likely Won’t Drop Dramatically Anytime Soon

If you’re hoping mortgage rates will drop a lot, here’s the reality. They probably won’t, at least not anytime soon. One of the big reasons comes down to that spread between the 10-year treasury yield and mortgage rates.

A few years ago, that gap got a lot wider as uncertainty in the economy pushed it as high as 3.19 points in 2023. Now here’s the part worth noting. That gap has been narrowing lately. It’s down to about 2.01, just above the long-term average of 1.76.

When the gap is wide, there’s more room for rates to fall. But when it’s relatively normal, like it is now, there’s less room for rates to fall.

Why Mortgage Rates Aren’t Higher Right Now

Today’s mortgage rate is basically the treasury yield plus the spread. So when either one moves, your rate moves with it. Based on today’s 10-year treasury yield of 4.68%, here’s what that spread means for your bottom line.

If the spread were still stretched out like it was in 2023, rates would be pushing close to 8% right now. That’s because the spread was over a full point wider than it is today.

But now, thanks to the spread narrowing recently, today’s rate sits around 6.69%. Compare that to the third scenario. If the spread were sitting at its exact long-term average, rates would be around 6.5%, only about a quarter point away from where rates actually are today. That means most of the improvement in mortgage rates we should realistically expect from a shrinking spread has already happened.

In other words, the same narrowing spread that’s the reason rates aren’t close to 8% today is also a big reason why they’re not likely to fall a lot further.

What This Looks Like in Greater Phoenix Right Now

This is where the national story turns into a local one. Rates plateauing doesn’t mean the Valley market is stuck. It means the market has adjusted around the rate instead of waiting on it.

The Cromford Report’s demand and supply index, which measures the balance between buyers and sellers across metro Phoenix, opened 2026 near 80. That’s well into buyer’s market territory, and it’s been described by Cromford’s senior analyst as some of the best buyer leverage the Valley has seen in years, driven by soft demand rather than a flood of desperate sellers.

The clearest sign of that leverage is in the concessions. More than half of Maricopa County transactions between $200,000 and $600,000 are closing with seller concessions right now, whether that’s a rate buydown, closing cost credit, or repair allowance. That’s a direct response to the rate environment we just walked through. Sellers can’t control the treasury yield or the spread, so they’re negotiating around it instead.

That said, this varies block by block. Value-tier markets like Buckeye and Apache Junction are seeing the most rate-sensitive buyers and the highest concession rates, while tighter submarkets like Gilbert and Chandler are more balanced, and pockets like Arcadia are still behaving like a seller’s market entirely. Your city and price point matter more right now than any national headline.

Bottom Line

That’s the trade-off with a narrowing spread. Rates may not be where you want them, but they’re better than they could’ve been, and Valley sellers are already adjusting to meet buyers halfway.

If you want to know what a rate buydown, seller concession, or your specific loan scenario actually does to your monthly payment in today’s Maricopa County market, that’s exactly what a Mortgage Strategy Call is for.

Your No Excuse Lender,

Kevin