Borrowing costs stay near troughs, lifting early-year purchase demand
Average United States long-term mortgage rates inched higher in the first full week of 2026 but remained close to their recent lows, offering a measure of relief to homebuyers still grappling with high prices and lean inventory.
Freddie Mac’s latest Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage averaging 6.16% as of January 8, up slightly from 6.15% a week earlier and down from 6.93% a year ago.
The 15-year fixed rate, a popular choice for refinancers, averaged 5.46%, up from 5.44% last week and down from 6.14% in the same week of 2024.
Rates steady, purchase demand improving
“In the first full week of the new year, mortgage rates remained within a narrow range, hovering close to the 6% mark,” Sam Khater, Freddie Mac’s chief economist, said.
“The combination of solid economic growth and lower rates has led to improving momentum in for-sale residential demand, with purchase applications up over 20% from a year ago.”
Those dynamics echo a pattern Freddie Mac highlighted in late 2025, when Khater noted that “over the last few weeks, mortgage rates have settled in at their lowest level in about a year.”
Taken together, the figures suggest that even modest moves lower from last year’s peaks have already started to coax some would-be buyers back into the market.
Mortgage rates continued to track the 10-year Treasury yield, which remained well below its 2024 highs, reflecting softer inflation readings and shifting expectations for Federal Reserve policy.
First-time buyers seek pockets of opportunity
Lower borrowing costs have been particularly important for first-time buyers, who faced rising rents and intense competition from investors for entry-level properties.
Realtor.com’s latest ranking of the best markets for first-time buyers point toward more affordable metros in the Northeast, Midwest and South, with Rochester, N.Y., topping the 2026 list for its mix of comparatively low prices, inventory and local amenities.
Rochester, for instance, is reported with a median listing price of about $139,900, far below many coastal markets.
Rates remain high by pre-2020 standards, yet low enough relative to 2024’s peaks to support a gradual recovery in purchase activity. If borrowing costs stayed near current levels or eased further, industry executives could see more incremental demand from first-time buyers and move-up borrowers alike, rather than the stop-start surges driven by sharp rate swings.
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