Mortgage rates still aren’t back at their pandemic-era lows, but real estate pros this week may be cautiously optimistic thanks to new numbers that showed demand for loans increasing.
The numbers, out Wednesday, come from the Mortgage Bankers Association’s Market Composite Index, which measures mortgage loan application volume. For the week ending Jan. 16, the Index rose 14.1 percent on a seasonally adjusted basis relative to the week prior. On an unadjusted basis, the Index rose 17 percent.
In other words, more people were applying for loans last week.
The MBA attributed the increased activity to improving rates, which fell to their lowest levels in more than a year.
“Mortgage rates declined further last week, driving another big week for refinance applications, which saw the strongest level of activity since September 2025,” MBA Deputy Chief Economist and Vice President Joel Kan said in a report on the new numbers. “The 30-year fixed rate averaged 6.16 percent, the lowest rate since September 2024.”
The 6.16 rate Kan mentioned — which is the average for a 30-year fixed rate conforming loan — is down from 6.18 a week earlier.
Kan also said in the report that “these lower rates prompted greater refinance activity from conventional and VA refinance borrowers, with increases of 29 percent and 26 percent, respectively.
“Refinance applications accounted for more than 60 percent of applications, and the average loan size also moved higher,” Kan added.
The report specifically noted that refinancing made up 61.9 percent of total loan applications last week. That’s up from 60.2 percent a week earlier.
Refinance activity is especially notable because many homeowners secured unusually low rates during the COVID-19 pandemic. Experts have suggested those homeowners may feel “locked in” by today’s rates, meaning they’re unwilling or unable to sell or refinance and end up with a higher and more expensive loan. This mortgage lock in effect has consequently been blamed for tying up inventory and keeping many would-be homesellers on the sidelines.
An increase in the number of refinance applications, however, suggests that more homeowners are in a position to trade their loans for today’s rates.
All of this is good news for real estate professionals and their clients who have been suffering through a slow housing market. That slowdown began in 2022 as mortgage rates spiked. And while today’s rates remain well above where they were prior to the slowdown, an increase in loan applications at least raises the specter of improvement on the horizon.
