Buyer affordability improved in November, with the national median payment applied for by purchase applicants decreasing to $2,137 from $2,199 the previous month, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI).
“Home buyer affordability improved in November, with a decline in mortgage rates providing relief to prospective home buyers,” Edward Seiler, MBA’s associate vice president of housing economics and executive director of the Research Institute for Housing America. “MBA expects that affordability conditions will continue to improve as mortgage rates decline, which should generate increased demand heading into the spring home buying season.”
The national PAPI decreased 2.8% month over month to 170.9 in November. With the decline, the index is now at its lowest level since February. A decline in the PAPI occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.
Median earnings were 3.9% compared with one year ago, and, while payments increased 8.1%, the strong earnings growth means that the PAPI is up 4% on an annual basis, according to the MBA.
For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,425 in November from $1,466 in October. The national median mortgage payment for FHA loan applicants was down $53 month over month to $1,902 in November.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased from $2,672 in October to $2,597 in November.
The five states with the highest PAPI were Idaho, Nevada, Arizona, Florida, and Utah, while the five states with the lowest PAPI were Wyoming, Louisiana, Alaska, Connecticut, and New York.
