Mortgage Refinance Activity Surges as Rates Dip Near 6% | What Phoenix Buyers and Sellers Should Know

By Scott Bryant | Phoenix Real Estate Market Update | January 2026

Mortgage refinance activity just hit its highest level in months, and it’s sending an important signal to both Phoenix home buyers and sellers.

According to the Mortgage Bankers Association (MBA), mortgage applications jumped 14.1% week-over-week, marking the second consecutive week of double-digit growth. The driver? Mortgage rates hovering near 6%, the lowest averages seen in more than three years, per Freddie Mac.

Why Refinance Activity Matters in the Phoenix Metro Market

The most notable shift is on the refinance side:

• Refinance applications increased 20% week over week
• Refinances are up 183% compared to the same time last year
• Refinances now account for over 60% of all mortgage applications

As Joel Kan, Vice President and Deputy Chief Economist at the MBA, noted, lower mortgage rates are prompting homeowners, particularly conventional and VA borrowers, to take action. Average loan sizes are also increasing, another sign that homeowners are leveraging equity.

For Phoenix homeowners, this is significant. Rising refinance activity often indicates:

• Increased homeowner confidence
• Strong equity positions
• Improved monthly cash flow after refinancing

All of these factors can translate into future home sales, renovations, or move-up purchases in markets like Phoenix, Scottsdale, Paradise Valley, and the North Valley.

Purchase Applications Are Rising Too | A Signal for Sellers

This isn’t just a refinance story.

Purchase applications increased 12% week over week and 18% year over year, showing that buyers are re-entering the market as rates ease.

In Phoenix, where affordability has been a major friction point, even modest rate improvements can:

• Increase buyer qualification power
• Expand the buyer pool
• Improve showing activity

For Phoenix home sellers, this creates a window where well-priced, well-presented homes can gain renewed traction, especially before spring inventory ramps up.

Current Mortgage Rates: What Buyers Are Seeing Now

• Freddie Mac reported the average 30-year fixed mortgage rate at 6.06%, the lowest in over three years
• Mortgage News Daily showed rates drifting back up slightly to around 6.21%

It’s important to note that MBA data runs on a short lag, meaning some of this surge reflects brief dips below 6%. Still, the broader trend shows rates have meaningfully improved compared to late 2024 and early 2025.

Will Lower Rates Stick?

Mortgage rates have declined since the start of the year, driven in part by policy announcements aimed at housing affordability, including discussion around federal purchases of mortgage bonds.

However, economists caution against expecting dramatic or long-lasting drops.

As Brad Case, Chief Residential Economist at Homes.com, explained, even if bond-buying initiatives move forward, any reduction in mortgage interest rates is likely to be modest and temporary.

Translation for buyers and sellers:
This is likely a window, not a permanent shift.

What This Means If You’re Buying or Selling in Phoenix

For buyers:

• Improved rates may increase affordability and loan approval amounts
• Competition could increase as more buyers re-enter the market
• Locking strategy matters more than timing the absolute bottom

For sellers:

• Buyer demand is showing early signs of life
• Pricing and preparation remain critical
• Homes that are move-in ready are best positioned to capitalize on renewed activity

Bottom Line from Scott Bryant

In the Phoenix metro real estate market, rising refinance activity combined with improving purchase demand is a leading indicator of momentum, not a headline to ignore.

Whether you’re considering refinancing, buying, or selling, the next few months could present opportunities but only with the right strategy.

If you want to understand how today’s mortgage rate environment impacts your specific situation in Phoenix, let’s talk through it with real numbers and a local market lens.

Scott Bryant is a Phoenix real estate advisor and team leader of Bryant Luxury Group, specializing in data-driven strategy across the Phoenix metro area.