ARMs Are Back: Is an Adjustable-Rate Mortgage Right for You?

ARM originations surged in Q2 2026 as rising rates push more buyers toward adjustable-rate options. Here's what California homebuyers need to know.

Adjustable-rate mortgages are making a serious comeback. In the second quarter of 2026, ARM originations climbed over 21% compared to the prior quarter, and ARMs now make up nearly 17% of all first-lien mortgage originations nationally. That's a meaningful shift — and it's being driven by one thing: higher interest rates.

When 30-year fixed rates feel out of reach, ARMs become an attractive alternative. They typically offer a lower starting rate for an initial fixed period — often 5, 7, or 10 years — before adjusting annually. For California buyers dealing with high home prices and stretched budgets, that lower initial payment can make a real difference in qualifying and in monthly cash flow.

That said, ARMs aren't for everyone. They work best for buyers who plan to sell or refinance before the adjustment period kicks in, or for those who expect rates to stabilize or fall in the coming years.

If you're considering whether a fixed or adjustable-rate mortgage makes more sense for your situation, we can walk you through the numbers. Contact us today to compare your options and find the loan structure that fits your goals.