Buyers are taking on riskier adjustable rate mortgages as affordability worsens

Homebuyers in the U.S. are turning to riskier adjustable rate mortgages (ARMs) as high interest rates make it less affordable for purchasers locking in new fixed rate mortgages, according to a new report.

The Mortgage Bankers Association's Market Composite Index, which measures loan application volume, found that the share of activity involving ARMs increased to 7.8% of total mortgage applications.

"One notable trend is that the ARM share has reached its highest level for the year at 7.8 percent," Mike Fratantoni...