Mortgage applications rise 28.5% after GSE $200B bond directive

Mortgage applications increased 28.5% from one week earlier, following President Donald Trump’s directive to Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds. That’s according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending January 9, 2026.

Last week’s results included an adjustment for the New Year’s Day holiday. On an unadjusted basis, the index increased 65% compared with the previous week.

The refinance index increased 40% from the previous week and was 128% higher than the same week one year ago.

The seasonally adjusted purchase index increased 16% from one week earlier. The unadjusted purchase index increased 51% compared with the previous week and was 13% higher than the same week one year ago.

“Mortgage rates dropped lower last week following the announcement of increased MBS purchases by the GSEs. Lower rates, including the 30-year fixed rate declining to 6.18%, sparked an increase in refinance applications,” said Joel Kan, MBA’s vice president and deputy chief economist. “Compared to a holiday-adjusted week, refinance applications surged 40% to the strongest weekly pace since October 2025. The average loan size for refinance applications was also higher, as borrowers with larger loan sizes are typically more sensitive to changes in rates.”

Added Kan, “Purchase applications also jumped last week and were 13% ahead of last year’s pace, as lower rates and higher inventory kept potential homebuyers active in the market.”

Refinance activity up

The refinance share of mortgage activity increased to 60.2% of total applications from 56.6% the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity increased to 7.0% of total applications.

By product, the Federal Housing Administration (FHA) share of total applications decreased to 19.2% from 20.0% the week prior. The U.S. Department of Veterans Affairs (VA) share of total applications decreased to 16.1% from 17.3% the week prior. The U.S. Department of Agriculture (USDA) share of total applications remained unchanged at 0.4% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) decreased to 6.18% from 6.25%, while interest rates for 30-year fixed-rate mortgages with jumbo loan balances increased to 6.42% from 6.32%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.08% from 6.09% and rates for 15-year fixed-rate mortgages decreased to 5.60% from 5.64%. The average contract interest rate for 5/1 ARMs decreased to 5.42% from 5.90%.