Adjustable-rate mortgage demand doubles as interest rates hit the highest since 2009
Mortgage rates moved even higher last week, crashing refinance demand and prompting potential homebuyers to apply for riskier loan products that offer lower rates. According to the Mortgage Bankers Association's seasonally adjusted index, total mortgage application volume fell 8.3% last week compared with the previous week. Demand is now half of what it was a year ago.
Buyers are, however, turning more now to adjustable-rate mortgages, which offer lower interest rates. ARMs can be fixed for terms like five, seven, or ten years, but they do adjust once the term is up to the current market rate, so they are considered slightly riskier than a 30-year fixed.
Buyers are, however, turning more now to adjustable-rate mortgages, which offer lower interest rates. ARMs can be fixed for terms like five, seven, or ten years, but they do adjust once the term is up to the current market rate, so they are considered slightly riskier than a 30-year fixed.
