Mortgage applications drop 8.5% after slight rate increase

Mortgage applications decreased 8.5% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending Jan. 23, 2026.

On an unadjusted basis, the index decreased 16% compared with the previous week. MBA noted that the results include an adjustment for the Martin Luther King Jr. Day federal holiday.

The refinance index decreased 16% from the previous week and was 156% higher than the same week one year ago. The refinance share of mortgage activity decreased to 56.2% of total applications from 61.9 percent the previous week.

The seasonally adjusted purchase index decreased 0.4% from one week earlier. The unadjusted purchase index decreased 4% compared with the previous week and was 18% higher than the same week one year ago.

“Mortgage rates increased for the first time in a month, and as expected, refinance applications fell by 16%. The 30-year fixed rate was the highest in three weeks at 6.24%,” said MBA’s Joel Kan, vice president and deputy chief economist. “FHA refinance activity bucked the overall trend and increased, as FHA rates remained almost 20 basis points lower than conforming rates. With rates holding in the 6% range, the refinance market is likely to remain sensitive to week-to-week rate movements.”

Added Kan, “Purchase applications were 18% higher than last year’s pace, and the average loan size stayed at its highest level since September 2025, signaling that prospective homebuyers remain active at the start of 2026.”

The adjustable-rate mortgage (ARM) share of activity increased to 7.6% of total applications. The Federal Housing Administration (FHA) share of total applications increased to 18.6% from 15.9% the week prior. The U.S. Department of Veterans Affairs (VA) share of total applications decreased to 14.7% from 16.2%, and the U.S. Department of Agriculture (USDA) share of total applications increased to 0.5% from 0.4% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) increased to 6.24% from 6.16%, while rates for 30-year fixed-rate mortgages with jumbo loan balances decreased to 6.34% from 6.39%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.06% from 6.04% and the average rate for 15-year fixed-rate mortgages increased to 5.64% from 5.55%. The average contract interest rate for 5/1 ARMs increased to 5.56% from 5.42%.