Mortgage application activity ended 2025 and began 2026 on the downturn, according to data from the Mortgage Bankers Association (MBA) for the two-week period ending Jan. 2. The data includes adjustments for the year-end holidays.
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 9.7% on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the index fell by 28% compared with two weeks ago.
The seasonally adjusted Purchase Index was 6% lower from two weeks earlier while the unadjusted Purchase Index decreased by 23% over the same period – the latter was also 10% higher than the same week one year ago.
The holiday adjusted Refinance Index decreased 14% from two weeks ago and was 133% higher than the same week one year ago. The unadjusted Refinance Index decreased 31% from two weeks ago and was 108% higher than the same week one year ago. The refinance share of mortgage activity increased to 56.6% of total applications from 53.8% the previous week.
Among the federal programs, the FHA share of total applications increased to 20.0% from 18.4% the week prior while the VA share of total applications increased to 17.3% from 16.3% and the USDA share of total applications inched up to 0.4% from 0.3% the week prior.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “FHA refinance applications saw a 19% increase, although that was a partial rebound from a drop the week before. MBA continues to expect mortgage rates to stay around current levels, with spells of refinance opportunities in the weeks when rates move lower. Purchase applications were 10% higher than the same week a year ago but were down over the week following decreases in conventional and FHA applications. 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.”
Lower and cap homeowners, a.k.a. hazard insurance.