Mortgage application activity rose sharply in January, driven primarily by a surge in refinancing activity as mortgage rates declined to a new low, according to the Market Composite Index from the Mortgage Bankers Association (Washington, D.C.). It measures total mortgage application volume, which increased 12.9% from December on a seasonally adjusted basis and was 61.3% higher than a year earlier.
As noted by the National Association of Home Builders (Washington, D.C.), “[t]he average contract interest rate for 30-year fixed mortgages dropped 13 basis points (bps) to 6.2% following the announcement of $200 billion in mortgage-backed securities (MBS) buybacks by the GSEs. Compared with January 2025, the 30-year fixed mortgage rate was 81 bps lower. The decline in rates supported month-over-month gains in both purchase and refinance activity. Purchase applications increased 2.9%, while refinance applications surged 19.8%. Relative to January 2025, purchase activity increased 16.2%, while refinance applications jumped 143.8%."
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