The 30-year mortgage rate and the 10-year Treasury yield move together almost lockstep. Over the last 25 years, their correlation has been approximately 0.91 — meaning about 83% of the variation in mortgage rates is explained by Treasury yields.
Why? Mortgage-backed securities (MBS) compete with Treasuries for investor capital. When Treasury yields rise, investors demand higher MBS yields to stay competitive, and lenders pass those costs to borrowers as higher mortgage rates. The gap between the two — the "mortgage spread" — typically sits around 1.5-2.0 percentage points during normal market conditions but widens sharply during stress (it exceeded 3 percentage points during the 2008 and 2020 crises).
For home buyers: watch the 10-year Treasury yield, not just Fed decisions. Treasury moves lead mortgage rate changes by 1-3 weeks. If you see the 10-year yield rise 0.5 percentage points, expect 30-year mortgage rates to follow within a month.