Mortgage Rates Drop Further, Applications Decrease Over a Two-Week Period

On Wednesday, January 7, 2026, Optimal Blue released its rate indices showing the 30-year fixed-rate mortgage (FRM) at 6.12 percent. The 30-day range was 6.12 percent to 6.25 percent.

The 15-year fixed-rate mortgage was 5.38 percent. The 30-day range was 5.33 percent to 5.55 percent.

“In the first full week of the new year, mortgage rates remained within a narrow range, hovering close to the 6% mark,” said Sam Khater, Freddie Mac’s Chief Economist. “The combination of solid economic growth and lower rates has led to improving momentum in for-sale residential demand, with purchase applications up over 20% from a year ago.” 

According to the Mortgage Bankers Association (MBA), mortgage applications decreased 9.7 percent from two weeks earlier. The holiday-adjusted Refinance Index decreased 14 percent from two weeks ago and was 133 percent higher than the same week one year ago. The unadjusted Purchase Index decreased 23 percent compared with two weeks ago and was 10 percent higher than the same week one year ago.

“Mortgage rates started the New Year with a decline to 6.25 percent, the lowest level since September 2024. Refinance applications were up 7 percent for the week but were at a slower pace than in the weeks leading up to the holidays,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “FHA refinance applications saw a 19 percent increase, although that was a partial rebound from a drop the week before. MBA continues to expect mortgage rates to stay around current levels, with spells of refinance opportunities in the weeks when rates move lower.”

Added Kan, “Purchase applications were 10 percent higher than the same week a year ago but were down over the week following decreases in Conventional and FHA applications. The average loan size was $408,700, the smallest in a year, driven by lower average loan sizes across both Conventional and government loan types.”

More housing and market news

President Donald Trump said he’s taking steps to ban large institutional investors from buying more single-family homes. “People live in homes, not corporations,” Trump said.

Private equity giants, real estate investment trusts, and other large institutional investors have amassed sizable portfolios of single-family rental homes over the past decade. Many people feel this has played a big part in reducing the housing supply and driving up prices. However, this narrative is not supported by empirical evidence, as the market share of institutional investors is less than 1 percent nationally. 

Thursday’s job reports showed a cooling U.S. labor market, with fewer job openings (7.1 million in November, down from 7.4 million in October) and sluggish hiring, despite solid economic growth, suggesting employers are still cautious. Friday’s BLS Jobs Report will be key and may dictate near-term bond market direction.

Additional mortgage activity

• The refinance share of mortgage activity increased to 56.6 percent of total applications from 53.8 percent the previous week.
• The adjustable-rate mortgage (ARM) share of activity decreased to 6.3 percent of total applications.
• The FHA share of total applications increased to 20 percent from 18.4 percent the week prior.
• The VA share of total applications increased to 17.3 percent from 16.3 percent the week prior.
• The USDA share of total applications increased to 0.4 percent from 0.3 percent the week prior.

This week in mortgage rates

Rates decrease. Here’s how average fixed rates broke down:

• 30-year fixed-rate loans: 6.12% (down from 6.14%)
• 15-year fixed-rate loans: 5.38% (down from 5.4%)

Check back next week for the most up-to-date mortgage and housing news.

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Dec 17 – Mortgage Rates Hover in Same Range, Year-End Purchase Applications Decrease

On Wednesday, December 17, 2025, Optimal Blue released its rate indices showing the 30-year fixed-rate mortgage (FRM) at 6.2 percent. The 30-day range was 6.14 percent to 6.25 percent.

The 15-year fixed-rate mortgage was 5.43 percent. The 30-day range was 5.33 percent to 5.55 percent.

“The average 30-year fixed-rate mortgage has remained within a narrow 10-basis point range over the last two months,” said Sam Khater, Freddie Mac’s Chief Economist. “With rates down half a percent over last year, purchase applications are 10 percent above the same time one year ago.”  

According to the Mortgage Bankers Association (MBA), mortgage applications decreased 3.8 percent from one week earlier. The Refinance Index decreased 4 percent from the previous week and was 86 percent higher than the same week one year ago. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 13 percent higher than the same week one year ago.

“Mortgage rates inched up last week following the FOMC meeting, as investors interpreted the comments to signal that we are near the end of this rate cutting cycle. As a result, mortgage applications declined slightly,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Purchase application volume typically drops off quickly at the end of the year, and this shifts the mix of the business, with the refinance share reaching 59 percent last week, the highest level since September. However, refinance activity has remained mostly the same for the past month as rates continue to hold at around the same narrow range.”

More housing and market news

Data released by the federal government showed that the unemployment rate rose 4.6 percent in November. It’s the highest unemployment rate since September 2021, when the economy was emerging from the Covid-19 pandemic. Employers added 64,000 jobs in November, but the federal government shed 168,000 jobs in October and November. The report exposed emerging imbalances that could tilt the labor market in either direction in the coming months.

“The report is a disappointment, overall,” said Beth Ann Bovino, Chief Economist at U.S. Bank. “The jobs market is weaker than we saw at the beginning of the year.”

In response to the U. S. Bureau of Labor Statistics report, MBA’s Fratantoni said, “FOMC members who voted last week for an additional rate cut received support for that action, given these signs of a weaker job market. Inflation data later this week will be the other key driver of future monetary policy steps. Mortgage rates are likely to be little changed by this news.”

According to the MBA’sBuilder Application Survey (BAS), mortgage applications for new home purchases increased 3.1 percent from a year ago. Compared with October 2025, applications decreased by 7 percent.

“Mortgage rates have remained in a narrow range, and inventories of both new and existing homes on the market have increased. Potential buyers have more homes to choose from, and this removal of supply constraints is leading to a stronger sales pace,” said MBA’s Fratantoni.  “New homebuyers continue to look for ways to extend their purchasing power or lower monthly payments, with 37 percent of new homebuyers using a mortgage choosing an FHA loan, and 24 percent choosing an ARM loan.”

Additional mortgage activity

• The refinance share of mortgage activity increased to 59 percent of total applications from 58.2 percent the previous week.
• The adjustable-rate mortgage (ARM) share of activity increased to 7.2 percent of total applications.
• The FHA share of total applications decreased to 19.5 percent from 20.2 percent the week prior.
• The VA share of total applications increased to 16.6 percent from 16.4 percent the week prior.
• The USDA share of total applications increased to 0.4 percent from 0.3 percent the week prior.

This week in mortgage rates

Rates drop slightly. Here’s how average fixed rates broke down:

• 30-year fixed-rate loans: 6.2% (down from 6.25%)
• 15-year fixed-rate loans: 5.43% (down from 5.55%)

Check back next week for the most up-to-date mortgage and housing news.

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Dec 10 – Mortgage Rates Rise Minimally, Application Activity Increases

On Wednesday, December 10, 2025, Optimal Blue released its rate indices showing the 30-year fixed-rate mortgage (FRM) at 6.25 percent. The 30-day range was 6.14 percent to 6.25 percent.

The 15-year fixed-rate mortgage was 5.55 percent. The 30-day range was 5.33 percent to 5.56 percent.

“The average 30-year fixed-rate mortgage is well below the year-to-date average of 6.62%, providing some sense of balance to the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. 

According to the Mortgage Bankers Association (MBA), mortgage applications increased 4.8 percent from one week earlier. The Refinance Index increased 14 percent from the previous week and was 88 percent higher than the same week one year ago. The unadjusted Purchase Index increased 32 percent compared with the previous week and was 19 percent higher than the same week one year ago.

“Compared to the prior week’s data, which included an adjustment for the Thanksgiving holiday, mortgage application activity increased last week, driven by an uptick in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Conventional refinance applications were up almost 8 percent and government refinances were up 24 percent as the FHA rate dipped to its lowest level since September 2024. Conventional purchase applications were down for the week, but there was a 5 percent increase in FHA purchase applications as prospective homebuyers continue to seek lower downpayment loans. Overall purchase applications continued to run ahead of 2024’s pace as broader housing inventory and affordability conditions improve gradually.”

More housing and market news

On Wednesday, the Federal Reserve made a quarter-percentage-point cut, which was the third cut this year and widely expected. It was an unusually narrow vote of 9 to 3 for the cut, underscoring the divide among officials over the effect rate cuts will have on inflation and employment.

“Everyone agrees that inflation is too high, and we want it to come down, and agree that the labor market has softened and that there’s further risk. Everyone agrees on that,” Powell said.

“Where the difference is, is how do you weight those risks? And what does your forecast look like?”

Despite the rising uncertainty of the economy, the Fed was optimistic about the road ahead and signaled rates would likely remain unchanged in the coming months.

According to MBA’s Mortgage Credit Availability Index (MCAI), mortgage credit availability rose by 0.7 percent in November. “Mortgage credit availability increased for the fifth consecutive month to its highest level since 2022, driven by a growing supply of ARM and cash-out refinance loan programs,” said MBA’s Kan. “Most of these loan programs still require lower LTV and higher credit scores to qualify. The mortgage rate on ARM loans is averaging almost 90 basis points lower than fixed-rate loans, so they remain a viable option for borrowers hoping to reduce their monthly payments or utilize some of their home equity. With the growth in these loan categories, the Conventional and Jumbo indexes were at their highest levels since 2020.” 

Additional mortgage activity

• The refinance share of mortgage activity increased to 58.2 percent of total applications from 53 percent the previous week.
• The adjustable-rate mortgage (ARM) share of activity decreased to 7 percent of total applications.
• The FHA share of total applications increased to 20.2 percent from 18.3 percent the week prior.
• The VA share of total applications increased to 16.4 percent from 15 percent the week prior.
• The USDA share of total applications remained unchanged at 0.3 percent from the week prior.

This week in mortgage rates

Rates rise very minimally. Here’s how average fixed rates broke down:

• 30-year fixed-rate loans: 6.25% (up from 6.2%)
• 15-year fixed-rate loans: 5.55% (up from 5.46%)

Check back next week for the most up-to-date mortgage and housing news.

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