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Homebuyers give risky adjustable-rate loans another look

20220622-bc-homeprices (copy)

A for-sale sign is pitched in the front yard of a downtown home at 2920 18th St. in June. ARMs, as the home-loan products are called, represented 7 percent of all U.S. mortgage applications during the week ended Aug. 12, more than twice January's rate but down from a peak of 9.5 percent a month and a half prior.

Once notorious, adjustable-rate mortgages have made a comeback lately as homebuyers wrestling with rising interest rates take on greater financial risk in exchange for lower payments, recalling for some the lending excesses that contributed to the housing bust of 2006-07.

ARMs, as the home-loan products are called, represented 7 percent of all U.S. mortgage applications during the week ended Aug. 12, more than twice January's rate but down from a peak of 9.5 percent a month and a half prior.