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djustable-rate mortgages (ARMs) are making a comeback, and real estate agents can play a key role in helping buyers navigate this option. Industry experts say ARMs deserve a second look, as they offer lower introductory rates compared to fixed-rate mortgages. In April 2025, ARMs accounted for 9.6% of all mortgage applications, the highest share since November 2023.

    The stigma surrounding ARMs stems from their role in the 2008 housing crash, when option ARMs with low "minimum payments" led to negative amortization and defaults. However, post-crisis regulations have eliminated these risks, and today's ARMs are governed by clear safeguards and stricter underwriting standards.

    With home prices high and interest rates near 7%, many buyers are struggling to afford homes. ARMs offer significantly lower introductory rates, which can translate into substantial savings for borrowers who plan to move or refinance within a few years. Agents can help clients make informed decisions by suggesting they consider ARMs as an option.

    While ARMs aren't suitable for everyone, they can be beneficial for buyers planning to move soon, dual-income households expecting future income growth, and first-time buyers eager to stop spending on rent. By being proactive and knowledgeable about financing options, agents can help clients make smarter decisions and expand access to homeownership in a market defined by limited inventory and stretched affordability.

    In today's market, ARMs are no longer the boogeyman they once were. With proper structuring and matching to the right borrower, they can offer real advantages for buyers who need them most. Agents should be part of the conversation about lending options with clients, helping them make informed choices that fit their needs and goals.