Mortgage Risk Rising With Home Prices

Pricing is trending upward for the housing market, and while mortgage rates are at historical lows, buyers are looking to riskier mortgages to afford their new home.

CNBC reports that the number of adjustable rate mortgage originations has seen just over a 40 percent jump from the first to second quarters of this year.

ARM demand usually rises from the first quarter to the second quarter, because spring is the busiest season for homebuying, and it's when families dominate the market, searching for bigger, higher-priced homes. Still, the jump in ARMs in the spring of 2016 was 15 percent compared with this year's 40 percent jump. This makes the case that buyers this year are struggling with affordability and opting for a lower-rate product.

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