Homebuyer affordability figures appear to have leveled off in June, with the national median payment requested by loan applicants dropping $4 from $1,897 in May to $1,893 currently.
This information comes from Mortgage Bankers Association (MBA) Purchase requisition payment index (PAPI), which measures the change in new monthly mortgage payments over time and relative to income, using data from the MBA’s Weekly Application Survey.
“Median mortgage application payments have been flat over the past two months, but remain much higher than earlier this year. A homebuyer’s typical mortgage payment in June was $509 higher. that in January, which is why, in addition to growing economic uncertainty and high inflation, buying demand has slowed in markets across the country,” said Edward SeilerMBA Associate Vice President, Housing Economics and Executive Director, Housing Research Institute of America. “There are signs that house price growth is slowing, which is good news for overall affordability if mortgage rates also start to fall. The median loan amount in June was down $10,182 from May and has fallen more than $20,000 since peaking in February.
Seiler added, “Sixteen states in June saw improved affordability conditions due to lower mortgage application amounts.”
The national PAPI fell 0.2% to 163.9 from 163.4 in May and 162.8 in April, meaning payments on new mortgages take up a smaller share of a typical person’s income . Compared to June 2021 (119.3), the index jumped 37.4%. For borrowers applying for low-payment mortgages (the 25th percentile), the national mortgage payment held steady at $1,241.
Other high-level takeaways from the report include:
- The national median mortgage payment was $1,893 in June, down from $1,897 in May and $1,889 in April. Payments increased by $509 (36.8%) in the first six months of 2022.
- The national median mortgage payment for FHA loan applicants was $1,474 in June, down from $1,430 in May and $1,022 in June 2021.
- The national median mortgage payment for conventional loan seekers was $1,959, up from $1,960 in May and up from $1,389 in June 2021.
- The top five states with the highest PAPI were: Idaho (264.2), Nevada (254.6), Arizona (240.2), Utah (217.3) and Florida ( 211.6).
- The top five states with the lowest PAPI were: Washington, DC (103.1), Connecticut (108.2), Alaska (115.4), West Virginia (118.5), and Louisiana (119.0) .
- Homebuyer affordability rose slightly for black households, with the national PAPI rising from 159.5 in May to 159.2 in June.
- Homebuyer affordability rose slightly for Hispanic households, with the national PAPI rising from 155.2 in May to 154.9 in June.
- Homebuyer affordability rose slightly for white households, with the national PAPI rising from 165.1 in May to 164.7 in June.