I started to reply "How many of these loans are sub-prime ARMs though?" and then went and looked for the data myself. I can't tell if these ARMs are risky, but we're seeing an early-2000's-level number of people applying for them.
https://www.cnbc.com/2022/05/11/adjustable-rate-mortgage-dem...
> “More borrowers continue to utilize ARMs to combat higher rates. The share of ARMs increased to 11% of overall loans and to 19% by dollar volume.” At the start of this year, when rates were still hovering near record lows, the ARM share was just 3% of all purchase applications. At 11% that is the highest share since March 2008.
https://www.mba.org/news-and-research/newsroom/news/2022/07/...
> The adjustable-rate mortgage (ARM) share of activity decreased to 9.5 percent of total applications.
https://newslink.mba.org/mba-newslinks/2022/november/mba-new...
> The ARM share of activity increased to 12.0 percent of total applications.
Now, my wife and I bought our current house on a 5/1 ARM that was capped at +-1%/year and I think 10% total. We then refi'd in April 2020 and got on a 30 year fixed. I'm not sure if new rules after 2008 require ARMs to have total/yearly caps or not, if they do then a bubble pop will likely hurt a lot less. If they don't, then we're likely 4-5 years out from another crash.
