Real Estate News

Adjustable Rate Mortgages show high performance as of March

Published: 09 Mar 2017

Buyers may face challenges in the housing market, but statistics going into March seem to show a significant high, at least in one area, according to the Mortgage Bankers Association. The source's latest Weekly Mortgage Applications Survey finally brings the organization's data past the end of February, meaning that possible buyers can see signs of new activity. Among all of the details listed, Adjustable Rate Mortgage growth is especially notable.

This is because ARM activity accounted for its highest percentage of the overall amount of mortgage applications activity dating back to October 2014, as a press release accompanying the announcement said. In addition, 5/1 ARMs grew by .13 percent, and the average loan size grew to $313,000, just as the number of Federal Housing Administration's 30-year fixed-rate mortgage grew by .11 percent. 

In general, the MBA found positive news in the results from both the Market Composite and Refinance Index. Of these, the former 3.3 percent within just a single week, and the latter rose by 5 percent during the same amount of time. This survey draws from more than 75 percent of retail mortgage applications.

CNBC spoke to an economist for the MBA, Joel Kan, who said that the changes in the mortgage sector reflect larger concerns that could become clearer soon.

"Mortgage rates increased last week as remarks by several key Federal Reserve officials strongly signaled a March rate increase," Kan said. "This was further supported by a few solid economic data releases, including GDP, inflation and manufacturing gauges."

The same article also said that the increase in interest rates could come later this month, as mortgage applications continue to mount. While the individual figures indicate growth, CNBC also suggested that buyers are specifically reacting to the chance of further interest rate spikes.