According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose again last week, moving up from the week before across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. With rates continuing to rise, more borrowers are opting for adjustable rate mortgages. ARM loans typically offer a lower rate for a fixed period of time but then, after that initial period, adjust to the current market rate. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says their popularity has doubled in recent weeks. “In a period of high home-price growth and rapidly increasing mortgage rates, borrowers continued to mitigate higher monthly payments by applying for ARM loans,” Kan said. “The ARM share of applications last week was over 9 percent by loan count … At 9 percent, the ARM share was double what it was three months ago.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
