A modest rate dip revived refinancing even as home purchase demand stayed muted
Mortgage rates edged lower last week to their weakest level in about a month, nudging more homeowners back into the refinance market even as would‑be buyers largely stayed on the sidelines.
The average contract rate on 30‑year fixed mortgages with conforming balances of $832,750 or less fell to 6.17% from 6.21%, with points steady at 0.56 for borrowers putting 20% down, according to the Mortgage Bankers Association (MBA). That tracked closely with Freddie Mac’s national average 30‑year fixed rate of 6.09% for the week ending Feb. 12, down from 6.87% a year earlier.
Refinancing led the rebound in volume. Applications to refinance rose 7% week over week and were 132% higher than the same week in 2025, lifting the MBA’s Market Composite Index 2.8% on a seasonally adjusted basis.
“Mortgage applications rose last week as the lowest rates in four weeks helped to revive some refinance activity,” Joel Kan, MBA vice president and deputy chief economist, said in commentary accompanying the data.
Kan tied the rate move to softer economic prints.
“Treasury yields ended the week lower as weaker data on retail sales and home sales outweighed better‑than‑expected readings on the job market for January,” he said.
“Mortgage rates moved lower with the 30‑year fixed rate decreasing to 6.17 percent, and all other loan types in the survey also declined,” he said.
Refinances accounted for 57.4% of total applications, up from 56.4% the prior week.
“Refinance applications increased across all loan types, marking the strongest week for refinancing since mid‑January,” Kan said.
“There was a drop in purchase applications overall, although VA purchase applications bucked the trend and increased four percent,” he said.
Purchase demand still lagged. The seasonally adjusted purchase index slipped 3% from the prior week and was just 8% higher than a year ago, underscoring how rate relief alone had not solved affordability pressures or inventory shortages.
Lower mortgage rates had made payments slightly more manageable, but new listings had not kept pace with demand and many owners remained locked into sub‑4% loans.
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