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