On January 18, 2026, average 30-year fixed mortgage rates dropped 19 basis points to 6.45%, marking the largest weekly decline in over a year. The move boosts housing affordability and could trigger a surge in refinancing activity.
- 30-year fixed mortgage rates fell 19 basis points to 6.45% on January 18, 2026
- 10-year Treasury yield declined 12 basis points to 3.89%
- MORT ETF rose 2.1%, TLT gained 1.8%, IYR surged 3.4%
- PFS ETF increased 2.3% on expectations of higher refinancing activity
- Refinance volumes could rise by 15% in the next three weeks
- Market shift reflects weakening inflation and stronger demand for safe-haven assets
Average 30-year fixed mortgage rates fell to 6.45% on January 18, 2026, a 19 basis point decline from the prior week, according to national lending data. This sharp drop reflects a broader market shift driven by weakening inflation signals and renewed investor demand for safe-haven assets. The decline brings rates closer to levels seen in early 2024, significantly improving affordability for homebuyers and refinance applicants. The drop follows a sustained rally in Treasury yields, with the 10-year U.S. Treasury yield falling 12 basis points to 3.89% over the same period. This inverse relationship between bond yields and mortgage rates has bolstered the appeal of mortgage-backed securities, particularly those tracked by ETFs such as MORT, which rose 2.1% on the day. The decline also supported broader fixed income markets, with the iShares U.S. Treasury Bond ETF (TLT) gaining 1.8%. The housing sector responded immediately, with the Real Estate Select Sector SPDR Fund (IYR) surging 3.4% as investors priced in increased home sales and refinancing volumes. Financial services stocks, particularly those tied to mortgage lending and servicing, also saw gains, with the SPDR S&P Financial Sector ETF (PFS) rising 2.3%. Analysts suggest that the rate drop could drive a 15% increase in refinance applications within the next three weeks. Market participants are now monitoring the Federal Reserve’s upcoming policy meeting for signs of a potential rate pause or dovish pivot. A continued decline in borrowing costs could further stimulate the housing market and support consumer spending, with implications for both real estate and financial services equities.