In July, the national PAPI decreased by 1.9% to 167.7, down from 170.9 in June. While median earnings increased by 2.9% compared to a year ago, the slight decline in monthly payments helped improve the affordability landscape. The PAPI is now down 3.8% year-over-year.
“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market,” said Edward Seiler, AVP of housing economics at MBA and executive director of Research Institute for Housing America.
For those applying for lower-payment mortgages, the national median mortgage payment dropped to $1,444 in July, down from $1,460 in June. Additionally, the Builders’ Purchase Application Payment Index (BPAPI) revealed that the median mortgage payment for new home purchases decreased to $2,452 in July from $2,510 in June.
The report also noted a shift in the mortgage payment to rent ratio (MPRR), which decreased from 1.50 at the end of March 2024 to 1.46 by the end of June 2024. This means that while mortgage payments for home purchases have increased relative to rents, the overall affordability for homebuyers is improving slightly.
