Is an ARM a Good Idea Right Now?

An ARM can be a good idea right now, but only for a buyer who knows two things: how long they will own, and whether they can carry the payment if it resets higher. I'm Nile Lundgren, founder of the Lundgren Team at SERHANT., with $550M in sales. I'm an agent, not a lender. Your lender runs the numbers.

If you are buying in New York or Florida and want to work through your timeline before you pick a loan, my team at SERHANT. will sit down with you. Talk to the Lundgren Team.

Picture the table the morning after a Fed meeting. Coffee, a lender quote, and two rates side by side: a 30-year fixed, and an ARM that starts lower. The word hanging over the table is gamble.

That word is the whole tension. And more buyers are sitting with it. The ARM share of mortgage applications rose to 11.3% in the week ending October 23, 2026, the highest level in more than a year, according to the Mortgage Bankers Association.

Here is how my team turns that word into a decision.

Will mortgage rates go up after the Fed meeting?

Nobody can promise where rates go next, and I won't. Here is what the Fed did, and why buyers felt it.

On October 28, 2026, the Federal Reserve held the federal funds target range at 3.75% to 4.00%. Two voting members, Lisa D. Cook and Beth M. Hammack, voted against the decision. They preferred to raise the range by a quarter point at this meeting.

That is the detail buyers feel. A hold with two votes for a hike does not sound like relief. It sounds like a Fed that is watching, not easing.

One thing to keep straight: the federal funds rate is a short-term policy rate. It is not the rate on your mortgage quote. Your lender sets that.

I wrote more on how I read the Fed and rates in Will mortgage rates go down after the Fed meeting?

Source: Federal Reserve press release, October 28, 2026

Why are more buyers choosing an adjustable rate mortgage in 2026?

Because the starting payment is lower. MBA said it directly: more borrowers applied for ARM loans "to lower their monthly payments."

Here are the average contract rates from MBA's Weekly Mortgage Applications Survey for the week ending October 23, 2026, released October 28:

• 30-year fixed, conforming balances ($832,750 or less): 7.37%
• 30-year fixed, jumbo balances (over $832,750): 7.28%
• 5/1 ARM: 6.41%

Same survey, same week. The 5/1 ARM average sits below both fixed averages. That lower starting rate is the pull MBA pointed to as the ARM share climbed to 11.3%.

Source: Mortgage Applications Increase in Latest MBA Weekly Survey, Mortgage Bankers Association, October 28, 2026

Is this 2006 all over again?

That is the headline fear, and I understand it. My read is different: an ARM is a tool, not a red flag.

The 2006 comparison is a story about a product. At my table, the story is about the buyer. The same ARM can be a smart fit for one buyer and a mistake for another. What separates them is timeline and cushion: how long you will own, and whether you can carry the payment if the rate resets higher.

So I am not going to put a 2006 chart in front of you. I am going to put two questions in front of you. That is where the real risk lives.

How does my team walk a buyer through an ARM vs fixed rate mortgage?

We start with the calendar, not the rate. When my team sits with a buyer, the first question we ask is simple: how long do you realistically see yourself owning this home?

Then we work through the rest, in order:

1. How long will you own? Hold that answer up against the fixed period on the ARM your lender quotes. If you expect to own longer than the fixed period, the reset is part of your plan, not a footnote.
2. Can you carry the reset? Ask your lender to show you the payment at the highest rate your loan terms allow. Then ask yourself whether you could carry that payment without being forced to sell. If the answer is no, the lower starting payment is borrowed comfort.
3. What could change in your life during that window? A job move, a business sale, a second home. Timelines are personal, and they belong in the loan talk.
4. What is certainty worth to you? Some buyers will pay more each month for a rate that never moves. That is a valid choice, and it is theirs to make.
5. Are you comparing like with like? Get both quotes from your lender, ARM and fixed, on the same day, for the same loan amount.

I train my team to ask these before anyone says "ARM" or "fixed." The buyer who has answered them walks in calm. Preparation creates freedom.

To be clear: I am a real estate agent, not a lender. This is how we prepare a buyer for the lender conversation, not lending advice. Your lender sets the terms, the caps and the reset rules, and your lender is the right person to walk you through them before you decide.

When you are ready to look at homes with your timeline in hand, start with our current New York listings.

Does an ARM make sense on a jumbo loan in New York or Florida?

It can, and the same two questions decide it. In MBA's survey, any loan balance over $832,750 counts as jumbo, which matters for buyers at Manhattan and South Florida price points.

In the same survey, the 30-year fixed jumbo average, 7.28%, came in below the 30-year fixed conforming average, 7.37%. MBA reports a single 5/1 ARM average, 6.41%, without splitting it by loan size.

So a jumbo buyer should ask their own lender for jumbo quotes, fixed and ARM, before assuming the ARM is the cheaper road.

And in Manhattan, my view has not changed: buyers have to get out there and make a lot of offers. Settling the loan question early is part of being ready when the right home shows up.

So is an ARM a good idea right now for you?

It can be, if your expected time in the home fits inside the fixed period and you can carry the payment if it resets. If either answer is shaky, the fixed rate is buying you certainty, and certainty has value.

The headline says ARMs are back. Fine. The better question is how long you will own, and whether you can carry the reset. Answer those two, and the question of whether you should get an ARM mortgage mostly answers itself, with your lender confirming the terms.

If the bigger worry is the market itself, I lay out how I read it in Is the housing market going to crash?

FAQ

What is the ARM share of mortgage applications?
In the week ending October 23, 2026, ARMs were 11.3% of all mortgage applications, the highest level in more than a year, according to MBA's Weekly Mortgage Applications Survey.

What did the Fed decide on October 28, 2026?
The Federal Reserve held the federal funds target range at 3.75% to 4.00%. Lisa D. Cook and Beth M. Hammack dissented, preferring a quarter-point increase.

Is a 5/1 ARM rate lower than a 30-year fixed rate?
In MBA's survey for the week ending October 23, 2026, the 5/1 ARM average contract rate was 6.41%, compared with 7.37% for a conforming 30-year fixed. Your own quote depends on your lender and your loan.

Who should I talk to before choosing an ARM?
Your lender. An agent can help you pin down your timeline, but the loan terms, caps and reset rules come from the lender.

How do I contact Nile Lundgren about buying a home in New York or Florida?
Call (917) 453-4526 or use the contact page at nilelundgren.com/contact.

Nile Lundgren, founder of the Lundgren Team at SERHANT., with $550M in sales and nearly two decades of experience. Licensed in New York and Florida. RealTrends Top 1 percent. Cast member of Netflix's Owning Manhattan.
Call (917) 453-4526 or contact the Lundgren Team at SERHANT. at https://nilelundgren.com/contact

Share

Nile Lundgren, founder of the Lundgren Team at SERHANT., has $550M in sales and is recognized among the RealTrends Top 1 percent. A cast member of Netflix's Owning Manhattan, he works with buyers, sellers and investors across New York and Florida, including Miami and Tampa. Tell him what you are planning and his team will follow up.