Prospective U.S. Homebuyers Consider ARM Products

Adjustable-rate mortgages (ARMs) are becoming more popular among prospective homebuyers due to the continued unaffordability of the U.S. housing sector. ARMs accounted for 10% of purchase-mortgage applications in the week ended October 3, the highest rate since 2023. Notably, while the average rate for a 30-year fixed rate mortgage product was 6.15% from October 24-29, it was only 5.46% for ARM products. The increased interest in ARMs as opposed to the traditional 30-year fixed rate mortgage likely illustrates a squeezed homebuyer looking for lower monthly payments. 

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