Sep 29, 2026 · 19 min
Mortgage spreads keep 9% rates unlikely despite market volatility
Are 9% mortgage rates possible?
The episode separates a plausible rise in borrowing costs from the far less likely combination of economic strength and spread deterioration needed for 9% mortgages.
- 1Geopolitical headlines and Treasury-yield volatility can push mortgage rates higher, but they do not alone make 9% rates likely.
- 2Growing inventory is improving housing affordability at the margin while demand remains constrained near mortgage rates around 7.5%.
- 3Higher rates are more likely to slow home-price growth than produce the historically rare 20% nominal decline.
Don't miss
Logan Mohtashami explains why 9% mortgage rates require both a very strong economy and much worse mortgage spreads.
The brief
Sarah Wheeler and Logan Mohtashami examine the 9% mortgage-rate question through the variables that matter most: Treasury yields, geopolitical risk, and mortgage spreads.
Mohtashami links recent volatility to Iran-related headlines, sanctions, oil prices, presidential statements, and uncertainty around the 10-year Treasury yield.
Housing tracker data show inventory growing while demand remains constrained near 7.5% mortgage rates, but current conditions do not resemble a sharp prior escalation.
The discussion rejects a forecast of a 20% nominal home-price crash, arguing that additional supply and higher rates are more likely to cool price growth.
The standout conclusion is that 9% rates would require both a very strong U.S. economy and significantly worse mortgage spreads, making them highly unlikely soon.