When home prices shot up during the housing boom, many homeowners took out adjustable-rate mortgages.
So just how popular were ARMs during the boom, and how popular are they are today, post mortgage crisis?
Well, using data from mortgage financier Freddie Mac, we can answer that question.
While it’s not every loan origination, it should paint a pretty clear picture as to how the popularity of ARMs surged, and then fell dramatically.
The chart below illustrates the use of ARMs from 2003 – 2011.
The ARM-share peaked at 36 percent in October 2004, and hit its low point of two percent in January 2009.
It will likely climb higher over the next decade, though it’s unclear if these loan products will ever grab the massive share they enjoyed during the boom.
Check out some adjustable-rate mortgage advantages (there are some you know).
Read more: Fixed Mortgage vs ARM
(photo: Elvert Barnes)