UPDATE: Mortgage rates in the United States have just plunged to 6.06%, the lowest level since September 2022, igniting a surge in home purchases and refinancing activities. This dramatic drop, confirmed by Freddie Mac, comes at a pivotal moment for the housing market, which has shown signs of cooling amid elevated borrowing costs.
The swift decline in mortgage rates has revitalized buyer interest, as many consumers are eager to take advantage of more favorable financing conditions. As of January 15, 2026, the average 30-year fixed-rate mortgage has decreased significantly, down from 7.04% just a year ago. The 15-year fixed-rate mortgage also fell to 5.38%, marking its lowest point since October 2024.
Following this announcement, President Donald Trump revealed plans to direct Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities, aiming to further reduce rates for consumers. This news coincided with the market’s reaction, as rates dipped below 6% before slightly rising again.
The immediate impact on the housing market has been profound. The Mortgage Bankers Association (MBA) reported a staggering 28.5% increase in total mortgage application volume week over week. Refinancing applications surged nearly 40%, as homeowners rushed to capitalize on the lower rates to decrease their monthly payments.
As the market adjusts, the average contractual 30-year mortgage rate decreased from 6.25% to 6.18% for conforming loans up to $832,750 with a 20% down payment. Points also saw a slight decline, dropping from 0.57 to 0.56, including origination fees.
Economists are attributing this rate decline not just to seasonal fluctuations. Joel Kan, chief economist at MBA, emphasized that this is a genuine shift driven by the recent decrease in rates, reflecting broader market dynamics rather than just holiday trends.
For potential buyers, now is a crucial time to evaluate financing options. Improving credit scores remains vital to securing the best available rates. Simple steps, such as paying bills on time and reducing credit card balances, can lead to significant savings over time.
Experts advise consumers to shop around, as different lenders may offer varying terms that could greatly influence total mortgage costs. Even a 0.25% difference in rates can result in substantial savings.
In a recent statement, White House Press Secretary Karoline Leavitt noted, “Existing home sales in December rose at their fastest pace in three years… mortgage rates have fallen to their lowest level in years… we expect this downward trend to continue.” This statement reflects a broader sense of optimism in the housing market.
However, potential homebuyers are urged to act swiftly. The current rates may not last indefinitely, and those who compare offers and make timely decisions stand to benefit significantly from reduced costs over the life of their loans.
As the housing landscape evolves, the message is clear: take advantage of this moment to secure lower mortgage rates. Those who are prepared and act quickly could save thousands over the long term, making this an urgent opportunity for many.
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