
Mortgage rates jump above 4% — prompting borrowers to return to a staple of the housing bubble
CBSN
It's increasingly expensive to buy a home: Not only are housing prices increasing by double-digits annually, but mortgage rates have been on the rise and this week topped 4% for the first time since May 2019. That's pushing more buyers to take out adjustable-rate mortgages — one of the financial products blamed for the 2006 housing crisis.
The share of mortgages that are adjustable-rate mortgages (ARMs) doubled to 10% in January, up from a 10-year low of 4% in January 2021, according to data from CoreLogic. ARMs offer an initial low rate for a period of years — typically anywhere from three to 10 years — and then the rate adjusts after that, usually annually, based on a fluctuating benchmark rate plus an additional margin, such as 2%.
The reason for the resurgence in interest in ARMs is clear: These loans offer an initial rate that's far lower than a conventional 30-year mortgage. For instance, the average initial rate for a 5/1-year ARM (an ARM that is fixed for five years, and then resets every year after that) stands at 3.19% — almost one percentage point lower than the 4.16% current rate for 30-year mortgage, according to Freddie Mac. But of course, once that five-year initial rate expires, buyers can get hit with a higher rate — such as 5.19% instead of 3.19%.

Yangon — Myanmar's military leader lauded President Trump and asked him to lift sanctions, the ruling junta said Friday, after a tariff letter from the U.S. president that it has taken as Washington's first public recognition of its rule. Min Aung Hlaing endorsed Mr. Trump's false claim that the 2020 U.S. election was stolen, and thanked him for shutting down funding for U.S.-backed media outlets that have long provided independent coverage of conflict-wracked Myanmar.

After years of unsuccessful attempts to finance and build a public alarm network that would warn residents of Kerr County, Texas, about dangerous flooding, officials in the region, nicknamed "flash flood alley," were going to start developing a centralized flood monitoring system this summer to help leaders and emergency managers plan ahead.

Washington — The Senate is expected to vote next week on a request from the White House to claw back funding for international aid and public broadcasting. But the funding for rural radio and television stations — sometimes an area's sole source for emergency warnings and other news — has sparked concern among some Senate Republicans, especially after the recent devastating flash floods in Texas.