Demand for ARMs reaches highest level since November 2022

  • U.S. mortgage rates rose for the seventh week in a row, with the 30-year mortgage rate inching closer to 8%
  • Mortgage demand fell to the lowest level since 1995 due to the jump in rates
  • Demand for adjustable-rate mortgages (ARMs) hit the highest share since November 2022
  • Overall home-buying demand dampened as rates rose
  • High rates are keeping a lid on home-buying and refinancing activity
  • The U.S. housing market is experiencing a demand and supply imbalance as rates rise
  • Home buyers are pulling back as borrowing costs surge
  • High rates discourage homeowners from selling, hurting the supply of homes for sale
  • The dynamic is likely to persist until rates fall or buyers and sellers accept higher rates as the new normal

U.S. mortgage rates have risen for the seventh consecutive week, with the 30-year mortgage rate inching closer to 8%. This increase in rates has caused mortgage demand to fall to its lowest level since 1995. As a result, more home buyers are turning to adjustable-rate mortgages (ARMs), with demand for ARMs reaching the highest share of overall mortgages since November 2022. The rise in rates has dampened overall home-buying demand and is keeping a lid on home-buying and refinancing activity. High rates are also discouraging homeowners from selling, which is hurting the supply of homes for sale. The U.S. housing market is experiencing a demand and supply imbalance as rates continue to rise. Until rates fall or buyers and sellers accept higher rates as the new normal, this dynamic is likely to persist.

Public Companies:
Private Companies: undefined
Key People: Joel Kan (Deputy Chief Economist and Vice President at the MBA)

Factuality Level: 7
Justification: The article provides information about the rise in U.S. mortgage rates and its impact on home-buying and refinancing activity. The information is based on data from the Mortgage Bankers Association. However, the article lacks in-depth analysis and context about the factors contributing to the rise in rates and the overall state of the housing market. It also includes some unnecessary background information and details that are tangential to the main topic.

Noise Level: 3
Justification: The article provides relevant information about the rise in U.S. mortgage rates and its impact on home-buying and refinancing activity. It includes key details such as the decrease in mortgage demand, the increase in adjustable-rate mortgages, and the average contract rates for different types of mortgages. The article also mentions the overall market composite index and provides a quote from the Mortgage Bankers Association. However, the article lacks in-depth analysis, scientific rigor, and actionable insights. It mainly reports on the current state of the housing market without exploring long-term trends or potential solutions.

Financial Relevance: Yes
Financial Markets Impacted: Mortgage market, housing market

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the rise in U.S. mortgage rates, which has implications for the mortgage market and housing market. However, there is no mention of any extreme event or its impact.