Homebuyer affordability improved slightly in September, 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.
The MBA’s data show that the national median payment applied for by purchase applicants in September was $2,155, down slightly from $2,170 in August.
The 0.7% decrease resulted in an index score of 173.8, down from a score of 175.0 in August.
An increase in the 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.
“Although there was a modest improvement in affordability last month, higher rates and low housing inventory are both keeping many would-be buyers out of the housing market,” says Edward Seiler, associate vice president, housing economics for the MBA, and executive director, Research Institute for Housing America, in a statement. “Challenges remains as 2023 comes to an end, but MBA is forecasting for a slight rebound in originations and a moderation in mortgage rates in 2024.”
The PAPI uses data from MBA’s Weekly Applications Survey.
The Builders’ Purchase Application Payment Index (BPAPI) – which measures affordability for new home purchases only – shows that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey increased from $2,609 in August to $2,640 in September.
Photo: Grahame Jenkins
