Home applications fell 8.5% in the week ending January 23, according to the Mortgage Bankers Association. This includes the preparation of the Martin Luther King Jr. public holiday.
The decrease comes after several weeks of increased demand for mortgages, but despite the federal holiday, mortgage rates are rising and borrowers are holding back.
The Market Composite Index, a measure of home loan application volume, fell 8.5% on a seasonally adjusted basis from a week earlier. On an unadjusted basis, the Index is down 16% compared to the previous week.
The Refinance Index was down 16% from last week and was 156% higher than the same week one year ago. The seasonally adjusted Purchase Index fell 0.4% from a week earlier. The unadjusted Purchase Index was down 4% from the previous week and 18% higher than the same week one year ago.
Mortgage interest rates are very high. The average rate for a 30-year mortgage rose to 6.09% in the week ending Jan. 22, according to Freddie Mac, but rates were the highest—6.96%—for the same week in 2025.
The share of mortgage refinancing decreased to 56.2% of total applications from 61.9% last week. The share of mortgage loans (ARM) for the project increased to 7.6% of the total projects.
The Federal Housing Administration’s (FHA) share of total applications rose to 18.6% from 15.9% last week. The share of veteran loan applications fell to 14.7% from 16.2% last week. The USDA’s share of total claims rose to 0.5% from 0.4% last week.
“Mortgage rates increased for the first time in a month, as expected, refinance applications fell by 16 percent. The 30-year fixed rate was at a three-week high of 6.24 percent,” MBA’s said. Joel Kanvice president and deputy chief economist.
“FHA refinance activity has bucked the overall trend and increased, as FHA rates remain approximately 20 basis points lower than the corresponding rates. With rates holding a 6 percent range, the refinance market may remain sensitive to weekly rate movements.”
Contract prices
The average interest rate for a 30-year fixed-rate mortgage with a favorable loan balance ($832,750 or less) rose to 6.24% from 6.16%, with a percentage point increase of 0.55 from 0.54 (including down payment) at 80% of the loan-to-value ratio. (LTV) Effective rate has increased since last week.
The average 30-year contract interest rate for fixed-rate mortgages with jumbo loan balances (over $832,750) decreased to 6.34% from 6.39%, with an increase of 0.40 points from 0.38 (including down payment) for 80% LTV loans. The active rate has decreased since last week.
The average interest rate for a 30-year fixed-rate mortgage backed by FHA increased to 6.06% from 6.04%, points increased to 0.75 from 0.73 (including down payment) for 80% LTV loans. The active rate has increased since last week.
The average interest rate for a 15-year fixed-rate mortgage increased to 5.64% from 5.55%, points decreased to 0.61 from 0.65 (including down payment) for an 80% LTV loan. The active rate has increased since last week.
The average contract interest rate for 5/1 ARMs increased to 5.56% from 5.42%, with a percentage point increase to 0.80 from 0.62 (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.
