Mortgage rates moved lower to end 2025 and start 2026, but that did little to pull demand back to the market.
For the week ended Jan. 2, 2026, total mortgage application volume fell 9.7% on a seasonally adjusted basis from two weeks earlier, according to the Mortgage Bankers Association’s seasonally adjusted index. There were additional adjustments made for the holidays, and the read is for two weeks because the MBA did not report last week.
Over those two weeks, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.25% from 6.32%, with points dropping to 0.57 from 0.59, including the origination fee, for loans with a 20% down payment. That was the lowest level since September 2024.
Applications to refinance a home loan declined 14% over the two-week period, but were still 133% higher than the same week one year ago.
“FHA refinance applications saw a 19 percent increase, although that was a partial rebound from a drop the week before,” said Joel Kan, an MBA economist, in the release. “MBA continues to expect mortgage rates to stay around current levels, with spells of refinance opportunities in the weeks when rates move lower.”
