If you're looking to buy a home in Hilton Head Island, Bluffton, or Beaufort, you've probably noticed that mortgage rates are finally starting to fall. The big question is: Will the trend continue - and how low could rates actually go?

Many experts believe there's still room for rates to drop, which could bring more opportunities to buyers and sellers in the Lowcountry real estate market. To understand what's driving this shift, let's take a closer look at a key financial indicator: the 10-year Treasury yield.

As a recent article from Redfin explains: “A lower mortgage spread equals lower mortgage rates. If the spread continues to decline, mortgage rates could fall more than they already have.”

📊 Why Mortgage Rates Are Tied to the 10-Year Treasury Yield

For over 50 years, 30-year fixed mortgage rates have closely followed the movement of the 10-year Treasury yield - a key benchmark for long-term interest rates.

Here's how it works:

When the 10-year yield increases, mortgage rates usually rise.

When the 10-year yield drops, mortgage rates tend to fall.

The difference between the two is called the spread, and it historically averages around 1.76%. This simple relationship helps explain why mortgage rates shift - and what they might do next in markets like Hilton Head, Bluffton, and Beaufort.

🧩 The Mortgage Spread Is Narrowing - That's a Good Sign

In recent years, the spread has been unusually wide due to market uncertainty - think inflation, interest rate hikes, and global instability. A wider spread = higher mortgage rates.

But recently, the spread has started to shrink.

As Redfin notes:

 "A lower mortgage spread equals lower mortgage rates. If the spread continues to decline, mortgage rates could fall more than they already have."

That's promising news for Lowcountry buyers looking at homes in Sea Pines, new builds in Bluffton, or waterfront properties in Beaufort.

📉 The 10-Year Treasury Yield Is Expected to Drop Too

It's not just the spread that's declining - the 10-year Treasury yield itself is projected to fall. Combine that with a narrowing spread, and there's real potential for mortgage rates to trend lower through 2025.

Here's a quick estimate:

Current 10-year Treasury yield: ~4.09%

+ historical spread of 1.76%

= estimated mortgage rate: ~5.85%

Compare that to the 7%+ rates we've seen recently, and you can see how big of a difference this could make for home affordability in the Lowcountry.

A Note of Caution: Things Can Still Change

Mortgage rates don't move in a vacuum. They're influenced by:

• Inflation

• Job market performance

• Federal Reserve decisions

• Consumer confidence

The trend is encouraging, but we're likely to see ups and downs along the way. Still, for anyone buying or selling in Hilton Head, Bluffton, or Beaufort, the outlook is better than it's been in years.

🏠 What This Means for Lowcountry Buyers and Sellers

If you're a buyer: Lower mortgage rates can improve your purchasing power and unlock more home options.

If you're a seller: Falling rates may bring more buyers into the market, helping your property stand out and sell faster.

✅ Bottom Line: The Lowcountry Market Is Moving - Are You Ready?

Keeping up with mortgage rate shifts can be confusing - especially when they impact such a major decision. That's why working with a trusted local real estate team matters.

The Drake Real Estate Team has helped hundreds of clients navigate the Hilton Head Island, Bluffton, and Beaufort real estate markets - from beachfront estates to family homes to first-time buyers.

📲 Want to stay up to date on mortgage rates and local trends?

Let's connect - and make sure you're ready for your next move in the Lowcountry. 

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