The national median payment that mortgage applicants would pay for a home purchase fell to $2,137 in November, down from $2,199 in October, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI).
The survey measures how new monthly mortgage payments vary across time – relative to income – using data from MBA’s Weekly Applications Survey.
“Homebuyer affordability improved in November, with a decline in mortgage rates providing relief to prospective homebuyers,” says Edward Seiler, associate vice president, housing economics, and executive director, Research Institute for Housing America, in a statement. “MBA expects that affordability conditions will continue to improve as mortgage rates decline, which should generate increased demand heading into the spring homebuying season.”
An increase in MBA’s PAPI – indicative of declining borrower affordability conditions – means that the mortgage payment to income ratio (PIR) is higher due to increasing application loan amounts, rising mortgage rates, or a decrease in earnings. A decrease in the PAPI – indicative of improving borrower affordability conditions – occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.
In November, the national PAPI decreased 2.8% to a score of 170.9.
With this decrease, the PAPI is now at the lowest level since February 2023.
Photo: Pepi Stojanovski