"The reality? If you look at the purchase application data, whenever rates go up, the ARM percentages do pick up, but they're like never above 10%, where in 2002 to 2005 that thing rose up. But the debt, the mortgage growth volumes, are so low that if you really want to use a per-capita basis, it's really low, he said. There's actually no mathematical way to have 41% of all the mortgages in America to be ARMs."
"Zero Hedge presents a consistently negative outlook doom porn, Mohtashami said. I'm fairly certain that the 41% of adjustable-rate mortgage (ARM) loans relates to multifamily lending. However, like many doomsday narratives, they failed to mention this detail likely because focusing only on residential single-family lending would not be as sensational."
"A Federal Reserve Bank of St. Louis white paper released on Aug. 7 confirmed that more than 90% of U.S. mortgages are fixed-rate loans, unlike countries such as Sweden and Canada, where ARMs or short-term products dominate."
"According to the Mortgage Bankers Association (MBA), ARM applications rose 85% year over year in the week ending Aug. 22, but that still only represented 8.4% of all applications. Lower ARM rates are attractive since the average ARM rate came in at 6.19%."
A viral claim that 41% of mortgages held by U.S. banks are adjustable-rate mortgages (ARMs) generated confusion. Purchase-application data show ARM shares rise when rates increase but typically remain below 10%, and overall mortgage growth is low on a per-capita basis. Federal Reserve and Dallas Fed research confirm that more than 90% of U.S. mortgages are fixed-rate, with 30-year fixed terms dominant. The 41% figure likely reflects multifamily lending rather than single-family residential mortgages. MBA data show ARM applications jumped 85% year over year but comprised only 8.4% of applications, with average ARM rates near 6.19%.
Read at www.housingwire.com
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