Demand for adjustable-rate mortgages rises as rates climb

Mortgage borrowers are increasingly turning to adjustablerate mortgages as borrowing costs rise. According to the Mortgage Bankers Association, ARMs accounted for 8.5% of all mortgage applications last week, up from 8% the week before and the highest share since June. The shift comes as the average rate for a 30year fixed mortgage with conforming loan balances rose to 6.85% from 6.79%, while the average rate for a fiveyear ARM fell to 5.82% from 5.94%. The MBA said the higher fixedrate mortgage cost helped push total mortgage application volume down 2.7% for the week. Refinance activity dropped 6% week over week and was 25% lower than a year earlier, while purchase applications were nearly flat. An MBA economist said higher rates continue to weigh on buyers even though housing inventory has improved in many markets. Market watchers are now waiting for upcoming inflation data, which could influence mortgage rates further.