US share of demand for adjustable-rate mortgages rises to 10.5% — CNBC

In the United States, the share of demand for adjustable-rate mortgages (ARMs) rose to 10.5%, the highest level since October 2025. Borrowers are increasingly choosing such loans in an effort to reduce monthly payments amid rising mortgage costs, CNBC reports.

Rates are rising

The average contract rate for 30-year fixed-rate mortgages for loans of up to $832,750 rose over the week from 7.49% to 7.50%. For loans with a 20% down payment, points, including the origination fee, declined from 0.84 to 0.83. The rate was more than one percentage point higher than a year earlier.

According to the Mortgage Bankers Association, total mortgage application volume declined week over week and was 37.5% lower than during the same period last year. Mortgage rates last week reached their highest level in nearly three years.

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Demand for refinancing and home purchases is falling

Applications to refinance home loans decreased by 0.4% over the week and by 56% compared with the same period last year. The number of mortgage applications for home purchases fell by 4% over the week and by 16% compared with the same week a year earlier.

ARM loans usually offer a lower rate and may provide for a fixed rate for up to 10 years. After that, it changes depending on future interest rate levels, which is why such loans are considered riskier.

There are more homes available on the market, but mostly in the higher price segment. The increase in supply is not due to new listings but to slower sales, while home prices continue to rise. According to the National Association of Realtors, August and September were the two slowest months of the year for home sales.