I thought most of the ARMs resetting this year will reprice to the prevailing market rate. As I understand it, the market rate for most of these loans is a short-term rate (like 11th district COFI or other short-term rate driven off of the fed funds rate). So the spike in long-term rates will have little immediate impact on the position of borrowers facing ARM reset. Of course the impact on affordability for the would-purchaser looking to finance with 30yr fixed is a different story.
