The use of adjustable-rate mortgages for home purchases has declined significantly in California during the past three months, the result of more caution among buyers and lenders in a market that is seeing slowing increases in home values, a real estate information service reported. The use of ARMs, which are easier to get and are considered by many to be an indication that buyers are stretching their finances, fell to 51.9 percent in February. This was down from 63.7 percent in January, 68.7 percent in December and 70.9 percent in November, according to DataQuick Information Systems. ARM usage peaked in May last year at 73.7 percent, up from the prior real estate cycle in September 1988 when ARMs accounted for 66.1 percent of all home purchase loans. "Some of the financing issues at play here are fairly complex and would include this year's higher conforming loan limit, the spread between the cost of an ARM and a fixed-rate mortgage, use of equity lines, and federal regulators who h...
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