Demand for riskier mortgages falls as rate gap narrows
Adjustable-rate mortgages lose appeal as their rate edge over fixed loans narrows Mortgage demand stays flat while refinance and purchase trends shift—see why now
Demand for adjustablerate mortgages has eased as their rate advantage over fixedrate loans shrinks, according to the Mortgage Bankers Association.
Total mortgage applications were little changed last week, rising just 0.04% from the prior week. The average rate for a 30year fixed mortgage dipped slightly to 6.57%, while the average rate for a fiveyear ARM rose to 5.79%.
ARM applications made up 7.6% of all mortgage requests last week, the lowest share since January and down from 9.6% in midMay. Refinancing applications fell 1% on the week, while purchase applications rose 1%. Analysts said buyers are still dealing with inflation and wider economic uncertainty, even as some markets offer more inventory and slower homeprice growth.