The MBA’s Purchase Applications Payment Index (PAPI), which tracks how mortgage payments stack up against income, reflected a 3.9% decrease in August. This drop signals an improvement in affordability, with the national PAPI falling from 167.2 in July to 160.7.
While mortgage payments decreased by 5.2%, a modest 3.2% increase in earnings further strengthened the affordability outlook, marking an 8.2% annual improvement.
For borrowers with more modest mortgage payments, the national mortgage payment at the 25th percentile fell to $1,388 in August from $1,444 the previous month. Additionally, the median mortgage payment for purchase mortgages in the MBA’s Builder Application Survey (BPAPI) also fell, reaching $2,362 in August compared to $2,452 in July.
Different loan types reflected similar trends. For FHA loan applicants, the median mortgage payment dipped to $1,817 in August, down from $1,838 in July and from $1,909 in August 2023. Conventional loan applicants also saw their median payment drop to $2,056, a notable decrease from $2,140 in July and $2,187 a year earlier.
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