This uptick in refis can help offset softening purchase demand, providing short-term volume stability for originators and servicers. However, heavy reliance on refis is historically volatile, as it’s highly sensitive to rate fluctuations and can evaporate quickly if rates rise again.
ARM activity picks up as buyers seek affordability
Adjustable-rate mortgage (ARM) applications jumped 16% over the week, pushing the ARM share to 11%.
“ARM applications increased 16% over the week, which pushed the ARM share to 11%, with the ARM rate more than 80 basis points lower than the 30-year fixed rate,” Kan said.
Typically, ARM demand rises when rates climb, but this week’s increase points to affordability challenges in a high-price market, as buyers look for ways to manage monthly payments.
For lenders, this means adjusting product offerings, underwriting standards, and risk management practices to accommodate a more diverse mix of loans.