U.S. mortgage rates fall for the first time in six weeks, dropping to 7.02% and stimulating a real estate frenzy.

In the US, mortgage rates have dropped for the first time in six weeks, keeping the housing application index at its highest level in a year. According to data released by the Mortgage Bankers Association (MBA) on Wednesday, for the week ending January 17, the 30-year fixed-rate mortgage contract decreased by 7 basis points to 7.02%. Following a surge in the previous week, the decrease in financing costs further stimulated loan activity. MBA's housing application index increased by 0.6%. Although the index has been adjusted for seasonal factors, there may still be significant fluctuations in the index in the early weeks of the year. Mortgage rates are typically tied to US Treasury bond yields. Last week, US Treasury bond yields declined as inflation data outperformed expectations, leading the market to anticipate that the Federal Reserve may cut interest rates earlier than previously expected. This week, government bond yields continue to fall, partly due to President Donald Trump not immediately implementing tariff policies early in his term. This trend may further suppress mortgage rates in the data for the coming week. Meanwhile, refinance applications dropped by 2.9% last week. MBA's survey, conducted weekly since 1990, gathers feedback from mortgage bankers, commercial banks, and savings institutions. The survey data covers over 75% of retail residential mortgage applications in the US.