Overview
- Average 30-year mortgage rates, which briefly touched 5.99% earlier in January and fell to 6.06% on Freddie Mac’s weekly survey, have bounced back to roughly 6.20%–6.26% on January 20–21, according to market trackers.
- Refinance applications jumped 20% week over week and 183% from a year ago, while purchase applications rose 5% on the week and 18% year over year, as the MBA’s survey showed a 30-year contract rate easing to 6.16%, the lowest since September 2024.
- The early-January drop followed President Trump’s directive for Fannie Mae and Freddie Mac to buy up to $200 billion of mortgage-backed securities, tightening MBS spreads and temporarily lowering quoted rates, though the move has drawn criticism over potential market distortions.
- Rates turned higher this week as bond markets sold off on geopolitical headlines and overseas moves, with analysts noting the GSE buying plan will influence spreads over time rather than producing a straight-line decline.
- Most forecasts still place average mortgage rates around 6%–6.5% through 2026 and view sustained sub‑5% as unlikely, while borrowers are eyeing cheaper options such as 15-year fixed loans near 5.37% and ARMs that typically price 50–75 basis points below 30-year fixed rates.