Homebuyer affordability decreased in November compared with October, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI), which measures how new monthly mortgage payments vary across time, relative to income.
In November, the national median payment applied for by purchase applicants increased to $2,133, up from $2,127 in October, according to the report.
That pushed the index score up to 162.8.
An increase in the index score is indicative of declining borrower affordability conditions – it 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 is indicative of improving borrower affordability conditions and occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.
“Homebuyer affordability conditions declined slightly in November as elevated mortgage rates and rising home prices impacted prospective buyers’ purchasing power,” says Edward Seiler, associate vice president, housing economics, and executive director, Research Institute for Housing America, in a statement. “With demographic support for housing demand, and the gradual increase in housing supply that is expected, home sales and purchase originations are expected to grow in 2025 even as affordability challenges persist.”
The national median mortgage payment of $2,133 was up $6 from October but down by $4 from one year ago, equal to a 0.2% decrease.
The top five states with the lowest index scores were Louisiana (109.6), Connecticut (117.4), Alaska (119.3), New York (126.1), and West Virginia (128.9).
Photo: Blake Wheeler