Aerial view of two-story single-family homes lining a neighborhood street on January 13, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
Mortgage rates fell to a one-month low, boosting refinancing activity and offsetting weak demand from homebuyers. As a result, total mortgage applications increased 1.8% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less, including origination fees for loans with a 20% down payment, increased from 0.61 to 0.62 points and decreased from 6.51% to 6.42%.
“Mortgage rates fell last week in light of developments in the Middle East and their impact on energy and commodity prices,” MBA Economist Joel Kang said in a release.
Home refinance applications, which are most sensitive to weekly interest rate movements, rose 5% for the week and 15% from the same week last year.
Homebuyers are still taking a wait-and-see approach as economic uncertainty continues. The number of home purchase applications decreased by 1% for the week, and was down 3% compared to the same week last year, marking the second consecutive week that the number of applications was below last year’s level.
“Purchase activity remained weak as potential homebuyers remained hesitant given the current economic uncertainty, and purchase applications remained below year-ago levels for the second consecutive week,” Kang said.
Mortgage rates continued to fall slightly this week, hitting a four-week low on Tuesday, as bond yields fluctuate due to oil price fluctuations related to the Iran conflict.
“It’s the same old story about what’s driving market volatility since early March: the Iran war is the primary motivator, and oil prices are often the most correlated indicator of bond yields and interest rates,” said Matthew Graham, chief operating officer at Mortgage News Daily.
