Adjustable-rate mortgages, or ARMs, are enticing to homebuyers in the market today. According to Ellie Mae’s latest Origination Insight Report, on data from Dec. 2018, ARMs comprised 9.2 percent of originations—a new record.
ARM gains are linked to the 30-year rate, which in December progressed to 5.17 percent, the report shows. Broken down, the 30-year conventional rate was 5.19 percent; the 30-year FHA rate was 5.2 percent and the 30-year VA rate was 5.01 percent.
“With the strong demand for housing and the rapid increase in property value appreciation, more consumers are turning to adjustable-rate mortgages in order to gain additional flexibility when competing for a home,” says Jonathan Corr, president and CEO of Ellie Mae. “This is another key indication of how demand has outpaced supply in the housing market as consumers pursue their dream of homeownership.”
For borrowers with a fluctuating mortgage rate, now could be ideal for a refinance, according to Freddie Mac. By historical standards, rates are reasonable, still, and a fixed-rate mortgage is generally more stable.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at firstname.lastname@example.org.