US Home Buyers Shift to Adjustable-Rate Mortgages as Rates Climb
U.S. home buyers are increasingly choosing adjustable-rate mortgages as 30-year fixed rates hit a three-year high of nearly 7.3%.
Adjustable-rate mortgages (ARMs) are seeing a resurgence among U.S. home buyers as 30-year fixed-rate mortgages reach nearly 7.3%, the highest level in approximately three years. The Mortgage Bankers Association reported that 10.3% of mortgage applicants opted for an ARM in the week ending September 25, marking the highest share since October 2025.
While ARMs provide lower introductory rates, they carry long-term risks when loans reset to market rates. Data from Intercontinental Exchange shows that 64,000 ARMs have already reset in 2026, with another 84,000 scheduled to reset soon. An additional 186,000 ARMs are expected to reset in 2027, with jumbo-loan borrowers facing the most significant payment shocks.
The highest concentrations of outstanding ARMs are currently located in California, Washington, D.C., and New York. Chris Sbonek, CEO of Mitten Mortgage Lending, noted that the firm has seen a rise in client inquiries regarding these loan products.
