Surge in Adjustable-Rate Mortgage Demand Amidst Record High Rates

Demand for adjustable-rate mortgages (ARMs) surged last week as the average rate on 30-year fixed mortgages reached its highest level since 2000. While rates on fixed mortgages rose, rates on ARMs fell, leading to a 15% increase in ARM applications. The Mortgage Bankers Association reported a slight uptick of 0.6% in total mortgage application volume. However, overall application activity remains low, with purchase applications still nearly 20% below last year's levels. The average loan size is at its lowest since 2017, indicating most sales activity is concentrated in the lower end of the market.