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The share of all mortgage loan applications with floating rates reached a high of over 30% in 2005, then dipped below 1% in late 2008. Adjustable-rate mortgage (ARM) application rates have hovered between 6% and 8% since around 2010, and as of early June ARMs made up only 6% of all mortgage loan applications.

Since fixed-rate mortgage rates are close to all-time lows at the moment, ARMs are not currently an attractive loan option. Mortgage underwriters are also now required to account for a borrower’s ability to pay the mortgage over the life of a loan, which “eliminates a lot of the borrowers who got ARMs that they shouldn’t have gotten,” according to Rick Sharga, executive vice president of Carrington Mortgage Holdings.

As for whether the drop in consumer demand for ARMs remains tied to their role in the housing crisis, industry experts are in disagreement. Sharga believes that ARMs will become more common over time, even if they don’t return to pre-crisis levels, while Sam Khater, chief economist for Freddie Mac, believes that borrowers and regulators are less willing to take financial risks than they were before the recession.

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