Last week, U.S. mortgage rates fell to their lowest level since September 2024, offering a glimmer of hope for a housing market that had gotten off to a slow start this year. According to data released Wednesday by the Mortgage Bankers Association, the contract rate for 30-year mortgages fell by 7 basis points to 6.25% in the week ending January 2. The rate on 30-year jumbo mortgages, used to purchase high-priced homes, fell to 6.32%, the lowest level since April 2023. These figures are encouraging for a housing market that has struggled with affordability in recent years. According to the National Association of Realtors, contract volumes have rebounded for four consecutive months, signaling growing sales momentum as the new year begins. Despite the decline in borrowing costs, the MBA’s home purchase index fell by 6.2% on a seasonally adjusted basis last week. However, a decline in buyer interest and increased volatility around the end-of-year holidays is a normal occurrence. Meanwhile, the seasonally adjusted refinancing index rose by 7.4%.