Homes in Crockett, California, US, on Thursday, Jan. 22, 2026.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates for conventional loans didn’t budge last week, and neither did overall demand, but borrowers are actively seeking other loan products that offer bigger savings.
Total mortgage application volume increased 0.3% last week 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, remained unchanged at 6.21%, with points remaining unchanged at 0.56, including the origination fee, for loans with a 20% down payment.
Applications to refinance a home loan rose 1% for the week and were 101% higher than the same week one year ago. Mortgage rates were 74 basis points higher a year ago. Most lenders say if a borrower can save 75 basis points, then the cost of the refinance is worthwhile.
Applications for a mortgage to purchase a home fell 2% for the week and were just 4% higher year-over-year. Home buyers are still facing a pricey market, and supply is starting to fall again after rising for much of last year.
“FHA purchase and refinance applications increased, helped partially by the FHA rate declining and remaining 20 basis points lower than the conforming 30-year fixed rate,” said Joel Kan, MBA’s vice president and deputy chief economist. “Borrowers are increasingly utilizing FHA loans as affordability challenges remain, despite recent improvements.”
In addition, the adjustable-rate mortgage (ARM) share of total applications increased to 8%, a seven-week high. ARM rates last week were almost a full percentage point lower than fixed rates.
Mortgage rates dropped slightly on Tuesday, according to a separate survey from Mortgage News Daily. That followed a weaker-than-expected retail sales report. All eyes are now on the monthly employment report set for release Wednesday.
“Several recent rate rallies have been slightly larger than they otherwise might have been because the market may be positioning for a downbeat jobs number,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “If it is weaker than expected, there’s certainly room for the rate rally to continue, but if the report shows resilience, rates would likely bounce back higher.”