In an aerial view, two-story single family homes line the streets on Jan. 14, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
Mortgage interest rates dropped last week to the lowest level in a month, prompting more current borrowers to seek savings in a refinance. While lower rates didn’t give potential buyers much incentive, the run on refinances was enough to push total mortgage demand 2.8% higher compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.17% from 6.21%, with points remaining unchanged at 0.56, including the origination fee, for loans with a 20% down payment.
“Treasury yields ended the week lower as weaker data on retail sales and home sales outweighed better-than-expected readings on the job market for January,” said Joel Kan, vice president and deputy chief economist at the MBA, in a release.
As a result, applications to refinance a home loan rose 7% for the week and were 132% higher than the same week one year ago. Last year, rates were 76 basis points higher. While that annual jump may seem large, refinancing was at extremely low levels at this time last year.
“Refinance applications increased across all loan types, marking the strongest week for refinancing since mid-January,” Kan added.
Applications for a mortgage to purchase a home dropped 3% for the week and were just 8% higher than the same week one year ago. While lower mortgage rates are making homes slightly more affordable, new supply is not coming onto the market fast enough, and concern over the broader economy has consumers sitting on the sidelines.
Mortgage rates didn’t move at all to start this holiday-shortened week, but economic data set for release this week could impact the current trajectory. In general, however, mortgage rates have been hovering in a pretty narrow range, between 6% and 6.25%, since the start of this year.
