The national median payment applied for by purchase applicants decreased 0.1% in June, from $2,165 in May to $2,162, according to a new report from the Mortgage Banker’s Association (MBA). With this reading, the MBA interprets that homebuyer affordability has essentially flattened.
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 June index found that the national PAPI decreased 0.1% to 177.2 in June from 177.4 in May. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,459 in June from $1,462 in May.
Key highlights:
- The national median mortgage payment was $2,162, down from $2,165 in May. This is up $269 from one year ago, equal to a 14.2% increase.
- The national median mortgage payment for FHA loan applicants was $1,824, up from $1,802 in May and up from $1,474 in June 2022.
- The national median mortgage payment for conventional loan applicants was $2,205, up from $2,202 in May and from $1,959 in June 2022.
- The top five states with the highest PAPI were: Nevada (263.9), Idaho (260.9), Arizona (238.4), California (230.8), and Florida (225.3).
- The top five states with the lowest PAPI were: Alaska (123.1), Louisiana (129.8), Wyoming (130.6), Connecticut (131.0), and North Dakota (136.8).
- Homebuyer affordability increased slightly for Black households, with the national PAPI decreasing from 176.5 in May to 176.3 in June.
- Homebuyer affordability increased slightly for Hispanic households, with the national PAPI decreasing from 169.1 in May to 168.9 in June.
- Homebuyer affordability increased slightly for White households, with the national PAPI decreasing from 178.7 in May to 178.5 in June.
Major takeaway:
“Homebuyer affordability is still strained this summer, with mortgage rates remaining high and volatile, and home prices high because of low inventory,” said Edward Seiler, MBA’s associate vice president of Housing Economics. “The median purchase
application amount fell from $330,000 to $326,000 in June, which is one positive sign that home prices are stabilizing. An ongoing combination of flattening home prices and lower rates would offer reprieve for households who are looking to buy a home.”
For the full report, visit https://www.mba.org/news-and-research.
