News•Feb 26, 2026
Why Adjustable-Rate Mortgages Are Surging in a Falling-Rate Market
Adjustable‑rate mortgages (ARMs) have surged to about 21% of U.S. mortgage originations, the highest share in three years, even as rates fall. In high‑cost states such as California, ARMs account for over 31% of loans, driven by a widening affordability gap. A 5/1 ARM now sits near 5.3%, saving borrowers roughly $500 per month on $1 million loans. Buyers are increasingly treating ARMs as a short‑term bridge, planning to refinance or sell before the fixed period ends.
