January mortgage data shows refi volume up 50% as rates dip

"Purchase lending showed more modest movement, rising 3% from December but remaining down 5% from a year earlier. Optimal Blue said this was due to a slower response of purchase demand to changing rate conditions early in the year. Mortgage rates declined across most major products during the month. The Optimal Blue Mortgage Market Indices (OBMMI)'s 30-year conforming fixed rate fell 7 basis points to 6.07%."

"Jumbo rates declined 16 bps to 6.25%, while U.S. Department of Veterans Affairs (VA) rates dropped 7 bps to 5.64% and Federal Housing Administration (FHA) rates were largely unchanged at 5.99%. The average locked rate on the Optimal Blue pricing engine fell below 6% for the first time since August 2022. January's data shows just how quickly refinance demand can respond when rates move lower,"

"On the secondary market side, the report found that lenders adjusted execution strategies as pricing dynamics shifted and investor demand strengthened. January's secondary market data reflects lenders' positioning early for a potentially more active origination environment, Vough said. Pricing trends were increasingly tied to eligibility rather than outright price give-ups, and agency MBS securitization reached its largest share since 2024. Meanwhile, rising MSR values and expanding investor participation point to a market focused on flexibility and long-term execution strategy as 2026 begins."

Mortgage rates declined across most major products in January, with the OBMMI 30-year conforming fixed rate falling 7 basis points to 6.07%. Jumbo rates dropped 16 bps to 6.25%, VA rates fell 7 bps to 5.64%, and FHA rates remained largely unchanged at 5.99%. The average locked rate on the Optimal Blue pricing engine fell below 6% for the first time since August 2022, triggering a substantial increase in refinance demand. Refinance activity comprised a larger share of overall volume, while purchase lending rose modestly and remained 5% below year-ago levels. Secondary market activity showed lenders shifting execution toward eligibility-focused pricing, higher agency MBS securitization share, rising MSR values, and broader investor participation.

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