Mortgage activity surged again last week as borrowers reacted to the recent drop in interest rates. Following the early-January rate swings, application volume continued to climb, pushing total mortgage applications to their highest level in more than three years.
According to the Mortgage Bankers Association (MBA), mortgage applications jumped 14.1% for the week ending January 16, building on the strong increase from the prior week. The momentum was driven primarily by homeowners rushing to take advantage of lower rates.
Refinance activity once again stole the spotlight. The Refinance Index rose 20% from the previous week and came in a staggering 183% higher than the same week last year—the strongest weekly refinance pace since September.
That spike wasn’t a coincidence. Earlier in January, 30-year fixed mortgage rates briefly dipped just below 6% intraday, a level many homeowners haven’t seen in years. Even though those sub-6% moments were short-lived, they were enough to trigger a wave of refinance applications.
Joel Kan, MBA’s Deputy Chief Economist, summed it up well:
“Mortgage rates declined further last week, driving another big week for refinance applications. These movements prompted greater refinance activity from conventional and VA borrowers.”
For homeowners in Mountlake Terrace, Mill Creek, and Bothell, where home values have risen significantly over the past few years, refinancing can be a powerful way to lower monthly payments, shorten loan terms, or improve cash flow.
It’s not easy for purchase demand to rise in the middle of rate volatility—but that’s exactly what happened. The Purchase Index increased 5% week over week, while unadjusted purchase applications jumped 12% and were 18% higher than this time last year.
This suggests that buyers in areas like Bothell—which continues to attract both first-time buyers and move-up households—and Mill Creek, where inventory remains tight, are stepping back into the market when rates show even modest improvement.
With refinance demand surging, it made up a larger share of total mortgage activity:
Refinance share: 61.9% (up from 60.2%)
ARM share: 7.1%
FHA share: 15.9%
VA share: 16.2%
USDA share: 0.4%
Conventional and VA refinances led the way, reflecting how sensitive homeowners are to rate movement—even small improvements.
Here’s a snapshot of average mortgage rates from last week:
30-Year Fixed: 6.16% (down from 6.18%)
15-Year Fixed: 5.55% (down from 5.60%)
Jumbo 30-Year: 6.39% (down from 6.42%)
FHA: 6.04% (down from 6.08%)
5/1 ARM: 5.42% (unchanged)
While rates aren’t guaranteed to stay this low, the recent dip clearly reminded borrowers just how quickly opportunities can appear—and disappear.
Here’s the local takeaway:
Homeowners are acting fast when rates improve
Refinance demand is at a multi-year high
Buyers are re-entering the market when affordability improves
Small rate changes can drive big shifts in activity
If you live in Mountlake Terrace, Mill Creek, or Bothell and have been waiting for the right moment to refinance or buy, this recent surge is a strong reminder that preparation matters. When rates move, the borrowers who are ready benefit the most.
At Home Right Lending, we’re a mortgage brokerage—not a bank. We work with multiple lenders to help you find the best loan option for your goals, whether that’s refinancing to save money or getting pre-approved to buy in a competitive market.
If you’re in Mountlake Terrace, Mill Creek, or Bothell, reach out today. We’ll help you evaluate your options and be ready for the next rate opportunity—whenever it shows up.