Why Borrowers Are Turning to Adjustable-Rate Mortgages
Hey there! I wanted to share some recent trends in the mortgage market that could impact your homebuying or refinancing plans. Last week, we saw a dip in mortgage applications as rising rates made it tougher for homebuyers to jump in. In fact, the number of applications dropped by 2.3%, with purchase activity slowing down a bit. However, it’s worth noting that demand is still 8% higher compared to this time last year, which is encouraging!
Fixed mortgage rates have been climbing, reaching an average of 6.56% — the highest we've seen in a while. This increase has caused many borrowers to reconsider their options. Interestingly, while the refinance activity stayed mostly stable, I noticed that more people are looking at adjustable-rate mortgages (ARMs) as a way to find lower initial rates. ARMs now make up nearly 10% of all applications, which is the highest share we've seen in quite some time.
If you're thinking about buying a home or refinancing, now might be a good time to consider an ARM if you want to save on your monthly payments. Just remember, while ARMs can start with lower rates, they can change over time. So, it's essential to weigh the pros and cons. I’m here to help you navigate these options and find the best fit for your financial situation. Give me a call if you have any questions!
