Quick overview

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US mortgage rates fell to one of their lowest points in years last week, which spurred a surge in buying and refinancing activity and gave hope to the flagging housing market.

In the final week of January, the 30-year mortgage contract rate fell 7 basis points to 6.18 percent. 9, based on data published on Wednesday by the Mortgage Bankers Association.

That is one of the lowest readings since 2022 and the lowest since September 2024.

The five-year adjustable mortgage rate fell to 5.42 percent, the second-lowest since May 2023, by almost half a percentage point.
The MBA’s purchase index rose by almost 16% last week to the second-highest level since February 2023 amid lower home financing costs.

For the first time since September, the refinancing gauge increased by over 40%.

At the beginning of the year and in the run-up to holidays, there are usually significant weekly fluctuations in mortgage activity. However, the numbers show some respite for a housing market that has been severely impacted by low affordability in recent years.

Thanks to builder incentives and price reductions, the annualized pace of new home sales in October was almost at its highest since 2023, according to government data released on Tuesday. President Donald Trump has suggested prohibiting institutional investors from purchasing single-family homes in an effort to increase housing affordability.

In an attempt to reduce the cost of home financing, he also ordered Freddie Mac and Fannie Mae to buy $200 billion in mortgage bonds. Responses from mortgage bankers are used in the MBA survey, which has been conducted weekly since 1990.