Mortgage application activity took a downturn for the week ending Jan. 23, according to data from the Mortgage Bankers Association (MBA). This week’s results include an adjustment for the Martin Luther King Jr. Day federal holiday.
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 8.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index dropped by 16% compared with the previous week.
The seasonally adjusted Purchase Index dipped by 0.4% while the unadjusted index tumbled by 4% – the latter was also 18% higher than the same week one year ago. The Refinance Index plummeted by 16%, although it was also 156% higher than the same week one year ago, and the refinance share of mortgage activity shrank to 56.2% of total applications from 61.9% in the previous week.
Among the federal programs, the FHA share of total applications increased to 18.6% from 15.9% the week prior while the VA share of total applications decreased to 14.7% from 16.2% and the USDA share of total applications inched up to 0.5% from 0.4%.
Joel Kan, MBA’s vice president and deputy chief economist, blamed the downturn on an uptick in mortgage rated, observing, “FHA refinance activity bucked the overall trend and increased, as FHA rates remained almost 20 basis points lower than conforming rates. With rates holding in the 6% range, the refinance market is likely to remain sensitive to week-to-week rate movements.”
However, Kan also noted, “Purchase applications were 18% higher than last year’s pace, and the average loan size stayed at its highest level since September 2025, signaling that prospective homebuyers remain active at the start of 2026.”
