Homebuyer affordability improved slightly in November, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI), which uses a variety of economic factors to determine affordability state by state.
The index shows that the average monthly mortgage payment applied for by mortgage borrowers decreased to $2,034 in November, down from $2,039 in October.
That brought the index score down 0.2% to 149.6, down from 149.8 in October.
While payments decreased 4.6%, earnings growth of 2.9% means that the index is down (affordability is higher) 7.3% on an annual basis.
For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased to $1,409 in November, up from $1,402 in October.
States where homes were the least affordable – relative to average income, inflation and other factors – in November included Idaho, Nevada, Arizona, Rhode Island and Utah.
States where homes were the most affordable included Louisiana, Connecticut, West Virginia, New York and Maryland.
“Affordability conditions have now improved for six straight months as lower mortgages rates and strong household earnings growth have increased prospective buyers’ purchasing power,” says Edward Seiler, associate vice president of housing economics and executive director of the Research Institute for Housing America, in a statement. “The national median mortgage payment was down $99 compared to November 2024. MBA expects that affordability conditions will continue to improve in 2026, with house prices forecast to fall nationally by 0.3 percent and mortgage rates forecast to remain around 6.4 percent throughout the year.”
An increase in index score is indicative of declining borrower affordability conditions and 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 index score is indicative of improving borrower affordability conditions and occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.
Photo: Blake Wheeler
