Mortgage Rates Rise to 6.92 Percent as Adjustable-Rate Applications Climb

The average 30-year fixed mortgage rate reached 6.92 percent in late May 2026, pushing more homebuyers toward adjustable-rate mortgages as they search for lower initial payments. Experian reported the trend in its June 2026 personal finance update, noting that rising rates are squeezing affordability for first-time buyers.

Adjustable-rate mortgages, or ARMs, typically offer lower initial interest rates than fixed-rate loans. The trade-off is that the rate can change after an initial fixed period, usually five or seven years, based on market conditions. When fixed rates are high, ARMs become more attractive to buyers who plan to sell or refinance before the adjustment period kicks in.

Applications for ARMs have risen as a share of total mortgage applications in recent months, according to data from the Mortgage Bankers Association. The shift reflects the pressure buyers are under as both home prices and borrowing costs remain elevated.

The housing market has been difficult for buyers since the Federal Reserve began raising interest rates in 2022 to combat inflation. Rates peaked above 8 percent in late 2023 before pulling back, but they have remained well above the sub-3 percent levels seen during the pandemic.

Experian noted that total household debt in the U.S. has risen to $18.8 trillion, with mortgage debt making up the largest share. Credit card balances dipped slightly in the first quarter of 2026 to $1.25 trillion, but remain significantly higher than pre-pandemic levels.

Financial advisors caution buyers considering ARMs to model out what their payments would look like if rates rise after the initial fixed period. They recommend choosing an ARM only if there is a clear plan for the property before the adjustment date.