As the 30-year fixed mortgage rate fell to a new low (6.22%) last week, analysts are expecting that fewer borrowers will move into the hybrid ARM product.

Previously, market observers said that the recent rise in the ARM share would take away supply from both the 30-year sector and the 15-year sector, with more of an impact on the 30-year product (see ASR 08/5). Analysts have also noted that there has been substantial originator selling of ARMs over the past few weeks. All these factors point to the increasing popularity of the hybrid product.

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