Mortgage Applications Today: Home Loan Applications Still Low Despite Lowest Rates Ever

Mortgage applications continue to decline—down 9.7% from two weeks ago, according to data from the Mortgage Bankers Association for the week ending Jan.

The Market Composite Index, a measure of home loan application volume, fell 9.7% on a seasonally adjusted basis from two weeks ago. On a constant basis, the Index is down 28% compared to two weeks ago.

The holiday-adjusted Refinance Index was down 14% from two weeks ago and was 133% higher than the same week one year ago. The unadjusted Refinance Index was down 31% from two weeks ago and was 108% higher than the same week one year ago. The periodically adjusted Purchase Index is down 6% from the past two weeks. The unadjusted Purchase Index was down 23% compared to two weeks ago and was 10% higher than the same week one year ago.

The decline in mortgage applications comes as mortgage interest rates end in 2025 at record lows. The average rate for a 30-year mortgage fell to 6.15% in the week ending Dec. 31, according to Freddie Mac.

Meanwhile, the refinancing share of mortgage activity rose to 56.6% of total applications from 53.8% last week. The share of mortgage loan (ARM) activity decreased to 6.3% of total activity.

The Federal Housing Administration’s (FHA) share of total applications rose to 20% from 18.4% last week. The share of veteran loan applications increased to 17.3% from 16.3% last week. The USDA’s share of total claims rose to 0.4% from 0.3% last week.

“Mortgage rates started the new year down to 6.25%, which is the lowest level since September 2024. Applications for refunds increased by 7% in the week but were slower than in the weeks before the holidays,” it said. Joel KanMBA vice president and deputy chief economist.

“FHA refinance applications saw a 19 percent increase, although that was a partial rebound from last week’s decline. The MBA continues to expect mortgage rates to remain at current levels, and refinance opportunities spell out weeks when rates drop.”

“Purchase applications were 10 percent higher than the same week last year but fell during the week following a decrease in conventional and FHA applications. The average loan size was $408,700, the smallest for the year, driven by lower loan sizes across all types of conventional and federal loans,” Kan said.

Contract prices

The average interest rate for a 30-year fixed-rate mortgage with a loan balance ($806,500 or less) decreased to 6.25% from 6.32%, with a percentage point decrease to 0.57 from 0.59 (including down payment) for an 80% TV loan rate (L). The active rate has decreased since last week.

The average interest rate for a 30-year fixed-rate mortgage with jumbo loan balances (over $806,500) decreased to 6.32% from 6.46%, with a percentage point increase to 0.42 from 0.32 (including down payment) for 80% LTV loans. The active rate has decreased since last week.

The average FHA-backed 30-year fixed-rate mortgage interest rate fell to 6.09% from 6.15%, remaining unchanged at 0.77 basis points (including down payment) for 80% LTV loans. The active rate has decreased since last week.

The average interest rate for a 15-year fixed-rate mortgage fell to 5.64% from 5.69%, points fell to 0.64 from 0.65 (including down payment) for an 80% LTV loan. The active rate has decreased since last week.

The average contract interest rate for 5/1 ARMs increased to 5.9% from 5.61%, with a decrease to 0.19 basis points from 0.23 (including down payment) for 80% LTV loans. The active rate has increased since last week.

Mortgage rates are calculated

Loan rates are calculated based on various factors in the economy, and the length of your loan will also factor into the loan amount you qualify for.

The average 30-year mortgage is tied to the 10-year Treasury note yield, according to Fannie Mae. As the yield on the 10-year Treasury note moves, mortgage rates follow.

The yield on the 10-year Treasury note is determined by expectations of short-term interest rates in the economy over the bond’s term, as well as short-term interest rates.