Desperate U.S. Home Buyers Turn to Risky Adjustable-rate Mortgages

More than 30% of California home sales in 2025 involved an adjustable-rate mortgage (ARM), and in Washington, DC, the figure was over 25%. ARMs almost went extinct after causing the 2008 financial crisis and record-low interest rates in the early 2020s gave consumers better options. However, after years of high interest rates and the current war causing consumers to lose hope of any lower inflation or lower interest rates in the near future, ARMs, with their low initial teaser interest rates are gaining appeal among consumers who may see ARMs as their only path to home ownership.