ARM demand falls, refinancing drops

An increasing number of borrowers have been converting their ARMs into new fixed-rate loans as the difference between adjustable and fixed mortgage interest rates narrow, analysts say.

Last week’s drop in rates managed to marginally impact demand for home refinancing.

The group’s seasonally adjusted index of refinancing applications edged up 0.1 percent to 1,573.5 compared to 1,571.4 the previous week.

Refinancings, however, decreased as a percentage of all mortgage applications, falling to 38.1 percent from 38.2 percent.