Health · Europa Today
Mortgage rates rose again last week, causing more borrowers to seek adjustable-rate mortgages (ARMs) as a way to find savings. Demand for ARMs increased to 8.5% of all mortgage applications, up from 8% the previous week, marking the highest level since June. During the pandemic, when rates were historically low, ARMs accounted for barely 3% of applications.
ARMs offer lower initial rates that can be fixed for up to 10 years. In contrast, the average 30-year fixed-rate mortgage rate for loans up to $832,750 increased to 6.85% from 6.79%, with origination fees rising to 0.67 from 0.65. Meanwhile, the average 5-year ARM rate fell to 5.82% from 5.94%.
Higher fixed rates led to a 2.7% drop in total mortgage application volume. Applications to refinance homes fell 6% for the week, the slowest pace since May 2025, and were 25% lower than the same week a year ago. Home purchase applications remained flat, down 0.2% but 4% higher than the same week last year.
Rising rates are discouraging prospective buyers despite increased housing inventory. Investors are awaiting monthly inflation data, which could influence mortgage rates sharply based on the outcome. Inflation and the federal budget deficit are key concerns driving rate increases.
Source: CNBC
