ARM mortgage demand rises as fixed-rate mortgages hit 14-month high
Borrowers are increasingly opting for adjustable-rate mortgages (ARMs) due to rising fixed mortgage rates, which have reached their highest level in over a year. According to the Mortgage Bankers Association, ARM applications accounted for 8.5% of all mortgage applications last week—their highest share since June and up from 8% the previous week. This shift reflects growing affordability concerns among homebuyers as fixed-rate mortgages remain unattractive due to higher rates. The average rate on a 30-year fixed-rate mortgage for conforming loans rose to 6.85%, marking its highest level since June 2025 and up significantly from the previous year. In contrast, ARM rates have remained relatively lower, with the average 5-year ARM dropping slightly last week. Total mortgage application volume fell by 2.7% on a seasonally adjusted basis as higher rates continued to deter refinancing activity. Market participants are closely watching upcoming inflation data for potential rate-moving implications.
Topics: ARM mortgages fixed-rate mortgages housing market mortgage rates