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Demand for riskier mortgages rises again, along with interest rates
CNBC • • business
Key Points:
- Mortgage rates increased last week, leading more borrowers to opt for adjustable-rate mortgages (ARMs), which accounted for 8.5% of all mortgage applications, the highest since June.
- The average rate for 30-year fixed-rate mortgages rose to 6.85%, while the average rate for five-year ARMs decreased to 5.82%, making ARMs more attractive due to their lower initial rates.
- Total mortgage application volume declined by 2.7%, with refinance applications dropping 6% for the week and 25% compared to last year, marking the slowest pace since May 2025.
- Mortgage applications for home purchases remained nearly flat, down 0.2% for the week but 4% higher than the same week last year, despite increased housing inventory and higher rates.
- Mortgage rates remained steady at the start of the week as investors awaited upcoming inflation data, which could significantly impact future mortgage rate movements.
