Here's what happened to mortgage rates in January (and what could happen next)

Homebuyers and owners looking to refinance, for the first time in years, largely entered 2026 with a sense of cautious optimism. And that feeling was supported by hard data and encouraging economic developments in the final four months of 2025, specifically. A declining inflation rate played a large role in encouraging the Federal Reserve's interest rate cuts. While those were on hold for the majority of the year, the central bank ultimately issued three straight reductions in its last three meetings of the year. That, in turn, helped drive mortgage interest rates down to their lowest level since 2022. 

While no Fed rate cut was issued in the bank's first meeting of 2026 this week, however, mortgage interest rates have remained stable. With various ways to secure a rate under 6% now, offers here could already be low enough to justify a purchase or refinance application. To better time your next move, however, it helps to know what exactly happened to mortgage rates in January and, perhaps more importantly, what could happen next.

Start by seeing how low your current mortgage rate offers are here.

Here's what happened to mortgage rates in January

Overall, mortgage interest rates remained remarkably stable in January, which may not be surprising considering that the Fed paused rate cuts in the month and the latest inflation reading remained steady at 2.7%. How stable mortgage purchase rates were, however, may surprise some. Case in point: The average mortgage interest rate on a 30-year mortgage on January 2 was 5.99% and 5.38% for 15-year terms. Compare that to the rates available on January 30: 5.99% for 30-year terms and 5.37% for 15-year options. This stability, then, could be the motivation buyers need to thoroughly shop for rates and lenders now.

A similar dynamic repeated itself in the refinance space, albeit not as starkly. On January 2, the average refinance rate for a 30-year term was 6.67% and 5.64% for a 15-year alternative. 28 days later, however, those rates sat just a bit lower at 6.59% and 5.48%, respectively.

While a consistently declining mortgage purchase or refinance rate is ideal, the reality is that volatility in this market in recent years was an anomaly and not the norm. Today's mortgage purchase rates, for example, are about in line with averages from the past. And refinancing, while not nearly as low as the sub-3% rates at the start of the decade, is moving in a direction that existing homeowners may want to explore again.

In short: Mortgage purchase and mortgage refinance rates stayed the same for much of January. But considering where they were a year ago (over 7% for purchase, for example) and considering the changing economic terrain, stability isn't such a bad thing. Consider crunching the numbers, then, to see if any of these options fit your budget again. You may be surprised at the answer.

Learn more about your current mortgage rate options here.

What could happen next to mortgage rates

While predicting the future of interest rates is impossible to do with precision, if current economic conditions hold, mortgage rates are likely to remain about where they are. 

For starters, there's no Fed meeting on the calendar for February, so any possibility of a rate cut will be tabled until at least March 18, which is when the central bank meets again. The unemployment reports and data readings released in February could impact rates in an upward or downward direction, depending on what is revealed, but neither is likely to have a dramatic impact, minus some substantial changes. 

And with a new Federal Reserve chairman on the horizon, markets and lenders may be taking a wait-and-see approach in the short term. All combined, mortgage rates in early February will likely (but not definitively) be around the same once March arrives, too.

The bottom line

Mortgage interest rates held steady in January, minus major economic developments or Fed rate activity that could have caused a change in direction. And, based on current projections, they are likely to remain stable in February, too. While additional rate drops, then, may still be off in the distance, stability here is the second-best thing buyers and owners can hope for. And they're likely to get more of it over the next 28 days.

Have more questions? Learn more about your current mortgage rate options here.