Mortgage Applications Edge Higher as More Borrowers Consider ARMs

The Mortgage Bankers Association reported a 0.8% seasonally adjusted increase in total mortgage application volume. Purchase applications rose 2% from the prior week, while refinance applications declined 1%, showing that homebuyers—not refinancers—provided the week's improvement.

Borrowers also showed more interest in adjustable-rate mortgages. ARMs accounted for 8.0% of application activity, the highest share in five weeks, as the reported average contract rate for a 5/1 ARM moved lower while fixed-rate survey averages edged higher. These national survey figures include points and are not personalized rate quotes.

For homebuyers, an ARM may offer a lower initial payment, but the adjustment schedule, caps, expected time in the home and ability to handle a future payment increase all matter. Compare fixed and adjustable options using the same loan amount, upfront costs and realistic ownership timeline before deciding.

Mortgage-rate information is provided for education only and is not a rate quote, offer, or commitment to lend. Actual rates, fees and terms vary by borrower, property, loan program, market conditions and lock period. Home-price indexes are not appraisals or forecasts for a specific property.

Source reporting: Housing Brief Housing News. This market update is an original summary and commentary prepared by the Carson Home Team.