The national median payment applied for by purchase applicants increased 2.5% in May, from $2,112 in April to $2,165, according to a new report from the Mortgage Banker’s Association (MBA). A new record high for the index, the data points to continuing struggles in homebuyer affordability.
MBA’s Purchase Applications Payment Index (PAPI) measures how new monthly mortgage payments vary across time—relative to income—using data from MBA’s Weekly Applications Survey (WAS).
The May index found that the national PAPI increased 2.5% to 176.7 in May from 172.4 in April. Compared to May 2022 (163.2), the index is up 7.6%. For borrowers applying for lower-payment mortgages, the national mortgage payment increased to $1,462 from $1,430 in April.
Key highlights:
- The national median mortgage payment was $2,165, up from $2,112 in April and from $2,093 in March. It is up $268 from one year ago, equal to a 14.1% increase.
- The national median mortgage payment for FHA loan applicants was $1,802 in May, up from $1,750 in April and up from $1,430 in May 2022.
- The national median mortgage payment for conventional loan applicants was $2,202, up from $2,170 in April and from $1,960 in May 2022.
- The top five states with the highest PAPI were Nevada (263.4), Idaho (258.5), Arizona (234.4), California (227.7) and Florida (225.3).
- The top five states with the lowest PAPI were Connecticut (122.2), West Virginia (122.6), Alaska (122.6), Louisiana (133.7) and Wyoming (136.8).
- Homebuyer affordability decreased for Black households, with the national PAPI increasing from 176.7 in April to 181.1.
- Homebuyer affordability decreased for Hispanic households, with the national PAPI increasing from 161.1 in April to 165.1.
- Homebuyer affordability decreased for white households, with the national PAPI increasing from 173 in April to 177.3.
- The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey increased from $2,445 in April to $2,515.
Major takeaway:
“Homebuyer affordability eroded further in May as prospective buyers continue to grapple with high interest rates and low housing inventory,” said Edward Seiler, MBA’s associate vice president of Housing Economics. “While supply remains low, we do expect that inventory will pick up in the near term, which will provide more opportunities for borrowers to buy a home.”
For the full report, visit https://www.mba.org/news-and-research.
