Up In ARMs:Adjustable Rate Mortgage Applications Soar To 2008 Pre-Lehman Mania Levels

Wednesday, July 24, 2013

Earlier today, the Mortgage Bankers Association reported that mortgage applications dropped another 1.2%, declining for the sixth consecutive week and the 10th of the past 11, which has all but put a nail in the coffin of the housing "recovery" (for some perspective on why, read this). But does that mean that as demand for mortgages dries up on even the smallest bounce in interest rates, that unless one is flush with cash, one is shut out of the housing market? Not at all. The reason for that is that as demand for conventional mortgages plunges, demand for unconventional ones - those which marked the mania phase of the last housing bubble, Adjustable Rate Mortgages, are back to 2008 levels.

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