The Mortgage Bankers Association Says Mortgage Payments Increased 17% Annually As Homebuyer Affordability Becomes More Challenging
The Mortgage Bankers Association says homebuyer affordability remained unchanged in July from June. However, mortgage payments increased 17% from last year.
The MBA’s Purchase Applications Payment Index (PAPI) measures how new monthly mortgage payments vary across time. The index draws it’s data from the MBA’s weekly applications survey.
The national median payment applied for by purchase applicants was $2,162 in July 2023. This payment is up $318 from a year prior. However, average payments remained unchanged from June to July. PAPI data also shows median earnings were up 3.7% compared to one year ago. Yet, mortgage payments increased by 17.2%.
The national median mortgage payment for FHA loan applicants was $1,854 in July. This is slightly up from $1,824 in June and up from $1,461 in July 2022. The national median mortgage payment for conventional loan applicants was $2,197. This is down from $2,205 in June and up from $1,892 in July 2022.
MBA Economist Edward Seiler told Housingwire:
The MBA also expects mortgage rates will most likely remain elevated until the end of the year. As a result, Homeowner affordability will remain a hurdle for many households looking to buy a home.
An increase in MBA’s PAPI speaks to declining borrower affordability conditions. It also means that the mortgage payment to income ratio (PIR) is higher. This is due to increasing application loan amounts and rising mortgage rates. A decrease in the PAPI occurs when loan application amounts decrease or mortgage rates decrease.
The top five states with the highest PAPI Index were Idaho and Nevada. Arizona, California, and Florida topped out the top five states with the highest PAPI Index. The top five states with the lowest PAPI were Connecticut and Louisiana. Alaska, West Virginia, and New York topped out the top five with the lowest PAPI Index.
This Article Originally Appeared On MFI-Miami
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