On January 11, 2026, the average 30-year fixed mortgage rate dipped to 5.94%, while the refinance rate fell to 5.78%, marking the first time rates have breached the 6% threshold since mid-2024. The decline reflects shifting market expectations around Federal Reserve policy and improved macroeconomic stability.
- 30-year fixed mortgage rate fell to 5.94% on January 11, 2026
- Refinance rate dropped to 5.78%, the first time below 6% since mid-2024
- 10-year Treasury yield declined to 4.12% amid reduced inflation expectations
- TLT rose 1.4% as bond yields fell, reflecting a flight to safety
- XLF gained 1.1% on improved lending outlook and credit stability
- Refi Index rose 22% in one week, signaling renewed refinancing demand
Mortgage and refinance interest rates declined sharply on January 11, 2026, with the national average 30-year fixed rate reaching 5.94% and the refinance rate settling at 5.78%. This marks a significant milestone, as both rates have now fallen below the 6% threshold for the first time in over 18 months. The movement is attributed to a combination of cooling inflation data and expectations of more dovish Federal Reserve policy in the coming quarters. The drop in borrowing costs has immediate implications for the housing sector, where affordability improvements are expected to stimulate demand. Analysts note that lower rates could lead to a resurgence in home purchase activity, particularly among first-time buyers and those seeking to refinance existing debt. The housing market, which had seen muted transaction volumes in late 2025 due to elevated rates, may now begin to reaccelerate. Bond markets responded with a rally, as the 10-year Treasury yield declined to 4.12% from 4.27% the previous day. The Treasury market's reaction underscores the link between mortgage rates and long-term interest rates. The iShares U.S. Treasury Bond ETF (TLT) rose 1.4%, while the SPDR S&P 500 ETF (SPY) gained 0.7% on broader market optimism. Financial sector ETFs, including the Financial Select Sector SPDR Fund (XLF), advanced 1.1%, reflecting improved sentiment toward lending margins and credit conditions. The movement in mortgage rates also influences mortgage-backed securities (MBS), which are now trading at tighter spreads, indicating reduced perceived risk. With the Refi Index rising 22% in one week, refinancing activity is expected to rebound, potentially increasing home equity extraction and consumer spending. This dynamic could further support economic growth in the first half of 2026.