Hardware Retailing The Industry's Source for Insights and Information
Mortgage application activity declined in May as higher mortgage rate continued to impact the market, according to the National Association of Home Builders (NAHB). At the same time, adjustable-rate mortgages (ARM) gained traction.
The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, found that applications fell 5.5% month over month in May on a seasonally adjusted basis, driven by refinance activity, which dropped 12.3% over the month, while purchase applications posted a modest 1.8% increase.
The average contract rate for a 30-year fixed-rate mortgage increased 13 basis points (bps) to 6.54% in May, as Treasury yields rose amid conflict in Iran. The rate remained 36 bps lower than its level a year ago.
With mortgage applications on a decrease, homeowners who may have been planning to move may look at remodeling instead, a market that independent retailers can lean into, especially in the bath and kitchen categories.
