Home prices are falling fast in some of the most expensive real estate markets, such as California's Bay Area, but interest rates are on the rise — meaning that for many, the home of their dreams is now out of their price range.
But some buyers have found a solution: adjustable-rate mortgages, which guarantee lower monthly payments for the initial years of a home loan.
While adjustable loans are riskier than traditional fixed-rate mortgages, real estate experts say most buyers opting for them are in good financial position and unlikely to default should their rates spike. Plus stricter regulations in the wake the 2008 housing crash afford home seekers more protection from predatory lending.
