Adjustable Loans Hit New Peak, Fuel US Home Sales

Published on:
12 September 2006 at 10:19 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00010126-adjustable-loans-hit-new-peak-fuel-us-hom/

The popularity of adjustable-rate mortgages boosted mortgage applications last week, offsetting the effect of rising interest rates and the toll they appear to be taking on refinancing.

The Mortgage Bankers Association’s seasonally adjusted index of mortgage applications rose 2.4 percent to 674.3 last week. Applications for ARMs accounted for 36.6 percent of all applications, the highest level since the MBA began compiling the data in 1990.

The surge in interest in ARMs was a big part of the rise in overall applications, considering the MBA’s refinancing index dipped 2.0 percent last week to 1,857.2.

ARMs appeal to homebuyers who want low monthly mortgage payments. But they are riskier than fixed-rate loans because their rates can be reset higher before maturity.

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Adjustable Loans Hit New Peak, Fuel US Home Sales

Unknown Author

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