Rates hovered near three‑year lows, but demand still lagged
United States mortgage rates ticked higher in late January, holding just above their lowest levels in more than three years and exposing a split market in which some borrowers moved to lock in deals while many potential buyers stayed on the sidelines.
Freddie Mac’s latest Primary Mortgage Market Survey showed the average 30‑year fixed-rate mortgage at 6.10% for the week ending January 29, up from 6.09% a week earlier and down from 6.95% a year ago.
The 15‑year fixed averaged 5.49%, compared with 5.44% last week and 6.12% a year earlier, keeping borrowing costs near their softest point since 2022.
“Mortgage rates remain near their lowest levels in three years, which is encouraging for potential homebuyers who have waited to enter the market for some time,” said Sam Khater, Freddie Mac’s chief economist.
“Lower rates, combined with strong income growth, have led to a steady increase in purchase applications compared to last year. We’re also seeing more homeowners refinancing their mortgages to benefit from these lower rates, as shown by the rise in refinance applications over the past year.”
Still, recent loan data showed how sensitive demand remained to even small rate moves. Mortgage applications fell 8.5% in the latest weekly survey, with refinance activity down 16%, though refis still made up 56.2% of all applications, according to the Mortgage Bankers Association.
“Mortgage rates increased for the first time in a month, and as expected, refinance applications fell by 16%,” said Joel Kan, MBA vice president and deputy chief economist.
“With rates holding in the 6% range, the refinance market is likely to remain sensitive to week‑to‑week rate movements.”
Economists broadly expected that backdrop to persist after the Federal Reserve left its benchmark rate unchanged and signaled a more cautious stance on future moves.
“Mortgage rates will remain elevated in 2026,” said Ershang Liang, economist at PNC Economic Research.
“But stronger job growth and continued wage gains should help juice housing demand and increase housing affordability, even with modest price growth.”
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