When did adjustable rate mortgages (ARMs) gain widespread popularity?

Adjustable rate mortgages (ARMs) became widely popular in the 1980s primarily due to the significant increase in interest rates during that decade. As fixed mortgage rates soared, ARMs presented borrowers with a viable alternative offering lower initial rates. This made them attractive to buyers who were looking to purchase homes at a time when affordability became a critical issue. The structure of ARMs allowed borrowers to benefit from starting with a lower rate that would adjust periodically, making homeownership accessible even when overall economic conditions favored higher rates.

The popularity during this time was largely influenced by the financial environment, where many homebuyers were seeking ways to mitigate the burden of high interest. Information on ARMs was increasingly available and understood, leading to broader acceptance among consumers and lenders alike.