Homebuyer affordability worsened in March, as the average mortgage payment applied for by purchase borrowers increased to $2,201, an increase of $17 compared with February and up $108 compared with March 2023, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI).
The index measures how new monthly mortgage payments vary across time – relative to income – using data from MBA’s Weekly Applications Survey (WAS).
“Homebuyer affordability conditions remain volatile as recent economic data continues to show that the economy and job market are strong,” says Edward Seiler, associate vice president, housing economics, for the MBA and executive director, Research Institute for Housing America, in a release. “These factors will keep mortgage rates at elevated levels for the near future, sidelining some prospective buyers from entering the housing market.”
“While rates remain elevated and housing supply is low, we do expect to see renewed activity as mortgage rates decline to low-to-mid 6 percent range by the end of the year,” Seller adds.
When looking only at new home purchases, the average mortgage payment applied for increased to $2,556 in March, up from $2,534 in February.
Photo: Alexander Grey