Why are mortgage rates falling in January 2026?

Mortgage rates have decreased to 6.25% for 30-year fixed loans, reaching their lowest point since September 2024.

What is the current mortgage application volume in early 2026?

Total mortgage application volume fell by 9.7% in the first two weeks of January 2026 compared to two weeks prior.

Are people refinancing their homes in early 2026?

Yes, refinance applications are up 133% year-over-year, indicating strong interest in refinancing despite lower purchase demand.

Home / Business and Economy / Mortgage Rates Dip, But Homebuyers Stay Away

Mortgage Rates Dip, But Homebuyers Stay Away

7 Jan

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Summary

Mortgage application volume fell 9.7% in early January 2026.
30-year fixed mortgage rates dropped to 6.25%, lowest since September 2024.
Refinance applications rose 133% year-over-year, purchase demand declined.

Mortgage Rates Dip, But Homebuyers Stay Away

In the opening weeks of 2026, mortgage rates experienced a notable decline, with the average for a 30-year fixed mortgage falling to 6.25%. This represented the lowest rate seen since September 2024. Despite this favorable trend, the decrease did not stimulate demand in the housing market, as total mortgage application volume contracted significantly.

For the initial two weeks of January 2026, seasonally adjusted mortgage application volume dropped by 9.7%. This downturn was particularly pronounced in applications for purchasing homes. In contrast, refinancing saw a substantial increase, with application volume up 133% compared to the same period in the previous year, highlighting a continued refinance boom.

Economists predict that mortgage rates are likely to remain stable around their current levels. While the overall purchase market shows weakness, periods of lower rates are expected to provide ongoing opportunities for homeowners looking to refinance their existing mortgages. The FHA refinance segment experienced a 19% increase, despite a prior dip.