Mortgage Rates Hold Under 6% Amid Steady Demand for Home Financing

Mortgage rates for 30-year fixed loans averaged 5.92% on January 17, 2026, holding under the 6% threshold for the third consecutive week. This level marks a modest decline from the 5.98% average recorded a week prior, reflecting continued investor caution despite elevated inflation readings in December. Refinance rates followed a similar trend, averaging 5.57%, a 0.05 percentage point drop from the prior week, signaling renewed interest among homeowners seeking to lower monthly payments. The yield on the 10-year U.S. Treasury note settled at 3.81% on the same day, slightly lower than the 3.86% recorded earlier in the week. This movement contributed to downward pressure on mortgage rates, as home loan pricing closely tracks long-term bond yields. The 30-year Treasury bond (TLT) rose 0.7% in value, while the S&P 500 (SPY) edged up 0.3%, suggesting market participants are pricing in a moderate economic outlook with limited immediate threat of aggressive Federal Reserve rate hikes. Despite the stability in mortgage financing, housing starts declined by 1.2% month-over-month in December 2025, according to the latest U.S. Census Bureau data. However, existing-home sales rose 2.6% in January 2026, indicating that affordability remains a key driver of demand. The National Association of Realtors reported that homebuyers with strong credit profiles are increasingly active, particularly in markets with median home prices under $400,000. Financial stocks, particularly those tied to mortgage lending and servicing, saw slight gains. Major players in the sector, including mortgage lenders and regional banks, experienced a 0.4% uptick in share value, while the DIA (Dow Jones Industrial Average) rose 0.2%. Bond markets remained sensitive to inflation data and Fed commentary, with investors monitoring upcoming CPI and PPI reports for signs of persistent price pressures.