Mortgage rates sit above the 10-year Treasury by a spread, and that spread widens when the rate environment turns volatile or elevated. The main driver is prepayment risk. A Treasury pays a fixed yield for its whole term if you hold it. A 30-year mortgage can be paid off or refinanced at almost any time, with no prepayment penalty on nearly every modern loan. Investors who buy mortgage-backed securities know that if rates fall even modestly, a wave of borrowers refinances and cuts their expected returns short, so they demand extra yield to accept that risk. Today's larger loan balances raise the stakes. It now takes only a small rate improvement to make a refinance worthwhile, where on the smaller balances of decades past you needed a full point or two. Volatility widens the gap too, since investors want a bigger cushion when day-to-day pricing is hard to predict. The wide spread reflects investor caution rather than lender profit. Lender margins actually compress in these stretches, since volume falls and lenders compete for fewer loans. As for when it normalizes, nobody can promise a timeline. The spread widens gradually and unwinds gradually, and it tends to tighten as rates stabilize and investors regain confidence. Watch the direction of the 10-year and how calm the bond market is rather than any single forecast.