http://www.dqnews.com/RRCAARM0306.shtm
"In February 51.9 percent of all [California] home buyers financed their purchases with an ARM, down from 63.7 percent in January, 68.7 percent in December and 70.9 percent in November, according to DataQuick Information Systems."
People are moving away from ARMs. The interest rate delta between ARM and fixed is not large, and maybe lenders or borrowers are wising up.
I still cannot believe Greenspan advised Americans to use ARMs in March 2004. Barely four months before he started raising the Fed Funds rate. What in the world was he thinking?