Mortgage applications decreased 8.5% for the week ending Jan. 23, according to the Mortgage Bankers Association. This includes an adjustment for the Martin Luther King Jr. federal holiday.
The decrease comes after several weeks of home loan demand rising, but aside from the federal holiday, mortgage rates ticked up and borrowers held back.
The Market Composite Index, a measure of mortgage loan application volume, decreased 8.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 16% compared to the prior week.
The Refinance Index decreased 16% from the previous week and was 156% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.4% from one week earlier. The unadjusted Purchase Index decreased 4% compared with the previous week and was 18% higher than the same week one year ago.
Mortgage interest rates edged higher. The average rate for a 30-year fixed mortgage rose to 6.09% for the week ending Jan. 22, according to Freddie Mac, but rates were much higher—6.96%—during the same week in 2025.
The refinance share of mortgage activity decreased to 56.2% of total applications from 61.9% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.6% of total applications.
The Federal Housing Administration (FHA) share of total applications increased to 18.6% from 15.9% the week prior. Veterans Affairs loans share of total applications decreased to 14.7% from 16.2% the week prior. The USDA share of total applications increased to 0.5% from 0.4% the week prior.
“Mortgage rates increased for the first time in a month, and as expected, refinance applications fell by 16 percent. The 30-year fixed rate was the highest in three weeks at 6.24 percent,” said MBA’s Joel Kan, vice president and deputy chief economist.
“FHA refinance activity bucked the overall trend and increased, as FHA rates remained almost 20 basis points lower than conforming rates. With rates holding in the 6 percent range, the refinance market is likely to remain sensitive to week-to-week rate movements.”
Contract rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) increased to 6.24% from 6.16%, with points increasing to 0.55 from 0.54 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $832,750) decreased to 6.34% from 6.39%, with points increasing to 0.40 from 0.38 (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 increased to 6.06% from 6.04%, with points increasing to 0.75 from 0.73 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 5.64% from 5.55%, with points decreasing to 0.61 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 5.56% from 5.42%, with points increasing to 0.80 from 0.62 (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.
