Homebuyer affordability declined in October, as the national median mortgage payment applied for by purchase applicants increased to $2,127, up from $2,041 in September, according to he 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.
“Homebuyer affordability conditions declined notably in October as rapidly rising mortgage rates pushed the national median mortgage payment up $86 from September,” says Edward Seiler, associate vice president, housing economics, and executive director, Research Institute for Housing America, in a statement. “With the increase in mortgage rates, the PAPI reached its highest level since July, and we expect weaker homebuyer affordability to remain a hurdle for prospective buyers in the final months of 2024.”
In October, the national index increased 2.8% to reach a score of 162.3.
That’s up from a score of 157.9 in September.
Median earnings were up 3.2% compared to one year ago, and while payments decreased 3.3%, the moderate earnings growth means that the PAPI is down 6.3% on an annual basis.
For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased to $1,431 in October from $1,369 in September.
Photo: David Nieto