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Mortgage payment index falls in August, modestly improving affordability
The MBA said the index declined 0.6% to 154.3, while the median monthly payment for purchase applicants dropped to $2,162.
HousingWire reports that the Mortgage Bankers Association’s Purchase Applications Payment Index fell to 154.3 in August as the median mortgage payment for purchase applicants declined to $2,162, down from $2,175 in July.
The index, which measures mortgage payments relative to borrower income, dropped 0.6% over the month. Over the past 12 months, earnings rose 4.1% while mortgage payments increased 2.9%, lowering the index by 1.1% year over year.
MBA associate vice president of housing economics Edward Seiler said affordability improved slightly because a decline in the median purchase loan amount helped offset the impact of higher mortgage rates. He added that sustained improvement depends on lower mortgage rates, continued income growth, and slower home-price growth.
HousingWire adds that payment affordability varied by loan type and state, with the lowest PAPI readings in the District of Columbia at 113.9 and Louisiana at 114.2, and the highest in Idaho at 258.6 and Nevada at 229.8. The report also said the median payment for 25th percentile, lower-payment loans fell to $1,492, while the MBA’s Builders’ Purchase Application Payment Index for newly built single-family homes rose slightly, with the median payment reaching $2,214 in August.