breaking

Rising Rates Push Borrowers Toward Riskier Mortgage Products

Climbing mortgage rates are forcing consumers into riskier loan products as traditional financing becomes less affordable. The 30-year fixed-rate mortgage with conforming balances reached 6.63% last week, up from prior levels. Adjustable-rate mortgages surged to nearly 10% of total applications, the highest share since October 2025. These ARMs offer lower introductory rates but carry elevated long-term risk because their rates reset after initial fixed periods. Home purchase applications dropped 4% week-over-week and were 8% higher year-over-year, despite mortgage rates near 7% a year ago. Overall mortgage application volume fell 2.3%, marking the lowest level in five weeks. Inflation concerns and rising Treasury yields drove the rate increases. Refinancing applications climbed 35% annually but fell 0.1% week-to-week.