WASHINGTON–While mortgage rates ticked down at the end of 2025 and start of 2026, it did little to stop mortgage applications from also declining, according to new data.
For the week ended Jan. 2, 2026, total mortgage application volume fell 9.7% on a seasonally adjusted basis from two weeks earlier, according to the Mortgage Bankers Association’s seasonally adjusted index. The MBA said it made additional adjustments made for the holidays, and the read is for two weeks because it did not report the prior week.
According to the MBA, over those two weeks, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.25% from 6.32%, with points dropping to 0.57 from 0.59, including the origination fee, for loans with a 20% down payment. That was the lowest level since September 2024.
Applications to refinance a home loan declined 14% over the two-week period, but were still 133% higher than the same week one year ago.
‘Partial Rebound’
“FHA refinance applications saw a 19% increase, although that was a partial rebound from a drop the week before,” MBA Economist Joel Kan said in a statement. “MBA continues to expect mortgage rates to stay around current levels, with spells of refinance opportunities in the weeks when rates move lower.”
Applications for a mortgage to purchase a home fell 6% from two weeks earlier and were 10% higher year over year.
“The average loan size was $408,700, the smallest in a year, driven by lower average loan sizes across both conventional and government loan types,” Kan added in a statement.
The ARM share of activity decreased to 6.3% of total applications.
