Snowstorms battered the country – and the housing market – in late January
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Mortgage demand in the United States pulled back for a second straight week, as a powerful winter system and lingering holiday effects weighed on buyers and left lower rates still short of triggering a broader rebound.
For the week ending Jan. 30, total mortgage applications fell 8.9% on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey.
On an unadjusted basis, overall volume rose 4% from the prior week, reflecting normal seasonality, while the purchase index slipped 14% adjusted and the refinance index dropped 5%.
Refinance activity, however, was still 117% higher than a year earlier, when mortgage rates hovered above 7%.
“Winter Storm Fern likely had an impact as much of the country was snowed in, hampering homebuying activity,” said Joel Kan, MBA vice president and deputy chief economist.
“The annual increase in purchase applications was the weakest since April 2025. Refinance activity also decreased over the week, despite mortgage rates moving lower. The 30-year fixed rate averaged 6.21 percent last week, a slight decline, but not significant enough to incentivize more borrowers to refinance. Additionally, this week’s results are being compared to the week that included the MLK Jr. holiday.”
Lower rates, but limited response
Freddie Mac’s Primary Mortgage Market Survey put the average 30-year fixed rate at 6.10% as of Jan. 29, near a three‑year low after a late‑2025 slide in borrowing costs.
Recent Freddie Mac releases described rates as “near their lowest levels in three years,” and pointed to stronger purchase and refinance activity compared with 2024, even as overall housing demand remained constrained by prices and tight inventory.
MBA’s survey showed the average contract rate for 30‑year conforming loans eased to 6.21%, with jumbo loans at 6.32% and FHA‑backed loans at 6.04%. Fifteen‑year fixed mortgages averaged 5.61%, while 5/1 ARMs came in at 5.37%. Across all these products, effective rates edged lower week over week.
The refinance share of total applications increased to 57.1% from 56.2%, suggesting rate‑sensitive borrowers who could still benefit from a lower coupon continued to lead activity.
Adjustable‑rate products lost ground, with ARMs slipping to 7.5% of applications. Government‑backed segments were mixed: FHA’s share fell to 17.8%, VA rose to 15.8%, and USDA loans dipped to 0.4%.
Familiar pattern for a cautious 2026 market
Even when rates dipped, demand often lagged. Mortgage applications fell nearly 10% over the final two weeks of 2025 despite rates retreating to their lowest level since September 2024, as borrowers stayed wary over the holidays.
In January, median mortgage payments hit a two‑year low while activity still remained stuck in holiday mode.
MBA officials and outside economists have repeatedly pointed to this disconnect – softer rates but only incremental demand – as evidence that affordability, macro uncertainty and the “lock‑in” effect for existing homeowners continue to overshadow modest rate relief.
What lenders are watching next
The small rise in refi share offers some relief for volume‑hungry lenders, but remains highly sensitive to day‑to‑day rate moves. Purchase demand, still just 4% higher than a year earlier on an unadjusted basis, indicates that many would‑be movers stay sidelined even with rates roughly a full percentage point below early‑2025 peaks.
With winter storms disrupting showings and a holiday‑distorted base week in the rear‑view mirror, market participants are now looking to February data for a clearer read on whether the combination of lower rates and the traditional spring selling season would finally translate into steadier purchase demand.
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