Mortgage Applications Today: Record-Low Mortgage Rates Spark Home Lending and Refinancing Surge

The demand for home loans continues into another week, as mortgage applications increased 14.1% for the week ending Jan. 16, according to the Mortgage Bankers Association.

The Market Composite Index, a measure of mortgage loan application volume, increased 14.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 17% compared with the previous week.

The Refinance Index increased 20% from the previous week and was 183% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5% from one week earlier. The unadjusted Purchase Index increased 12% compared with the previous week and was 18% higher than the same week one year ago.

Home loan applicants are seeing mortgage interest rates at the lowest level in more than three years. The average rate on a 30-year fixed home loan dropped to 6.06% for the week ending Jan. 15, according to Freddie Mac. Rates averaged 7.04% during the same period in 2024.

The refinance share of mortgage activity increased to 61.9% of total applications from 60.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.1% of total applications.

The Federal Housing Administration (FHA) share of total applications decreased to 15.9% from 19.2% the week prior, but Veterans Affairs loans share of total applications ticked up slightly to 16.2% from 16.1% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.

"Mortgage rates declined further last week, driving another big week for refinance applications, which saw the strongest level of activity since September 2025. The 30-year fixed rate averaged 6.16 percent, the lowest rate since September 2024,” said Joel Kan, MBA’s vice president and deputy chief economist.

"These lower rates prompted greater refinance activity from conventional and VA refinance borrowers, with increases of 29 percent and 26 percent, respectively. Refinance applications accounted for more than 60 percent of applications, and the average loan size also moved higher."

Contract rates

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) decreased to 6.16% from 6.18%, with points decreasing to 0.54 from 0.56 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $832,750) decreased to 6.39% from 6.42%, with points decreasing to 0.38 from 0.43 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.  

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.04% from 6.08%, with points increasing to 0.73 from 0.68 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.55% from 5.60%, with points increasing to 0.65 from 0.61 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 5.42%, with points increasing to 0.62 from 0.49 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

Mortgage rates calculated

Mortgage rates are calculated by various factors in the economy, and the length of your loan will also figure into the mortgage rate you qualify for.

The 30-year mortgage rate is tied to the yield of the 10-year Treasury note, 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 for shorter-term interest rates in the economy over the duration of a bond, plus a term premium.