Chart 53 Shrinking ARM Market Is a Prelude to Decelerating Subprime Originations

Year ARM as a Percentage of Total Purchase Market
1995 32%
1996 27%
1997 22%
1998 12%
1999 21%
2000 24%
2001 12%
2002 17%
2003 18%
2004 35%
2005 30%

Notes: ARM = adjustable-rate mortgage. For 2005, the figure is an estimate from the Mortgage Bankers Association. ARM percentage was at 10-year lows in both 1998 and 2001 at 12 percent. ARM percentage was at a 10-year high in 2004 at 35 percent. Currently, ARM percentage has decreased by 14 percent from its previous high to 30 percent.
Sources: Federal Housing Finance Board, Mortgage Bankers Association, and CIBC World Markets.

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