Borrower affordability is increasing, as the national median payment applied for by purchase applicants fell to $2,167 from $2,219 in May. This is according to the Mortgage Bankers Association's (MBA) Purchase Applications Payment Index (PAPI), which measures how new monthly mortgage payments vary across time – relative to income – using data from MBA’s Weekly Applications Survey (WAS).
“Homebuyer affordability conditions improved for the second straight month as declining mortgage rates continue to increase purchasing power and entice some borrowers back into the housing market,” MBA’s Associate Vice President of Housing Economics Edward Seiler said. “The median loan application amount fell to $320,512 in June, indicating that home-price growth is moderating, which should boost additional activity,” added Seiler, who is also executive director of the Research Institute for Housing America.
The recent 2.4% decrease in the PAPI indicates an improvement in borrower affordability conditions, as it fell to 170.9 in June from 175.0 in May. Median earnings were up 3.9% compared to one year ago and the PAPI fell by 3.6% on an annual basis.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased to $2,510 in June from $2,522 in May.
The national median mortgage payment was $2,167 in June – down $52 from May. That’s $5 higher than one year ago, equal to a 0.2% increase.
For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,460 in June from $1,509 in May.
The national median mortgage payment for FHA loan applicants was $1,907 in June, down from $1,924 in May and up from $1,854 in June 2023.
The national median mortgage payment for conventional loan applicants was $2,180, down from $2,226 in May and down from $2,205 in June 2023.
