The national median payment applied for by purchase applicants increased 0.9% to $2,112 in April compared with $2,093 in March, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI).
“Home buyer affordability eroded further in April, with both the typical borrower monthly payment and median purchase amount rising due to higher rates and home prices,” says Edward Seiler, MBA’s associate vice president, housing economics, and executive director, Research Institute for Housing America. “Elevated interest rates and low housing supply have kept many prospective borrowers on the sidelines. However, MBA expects mortgage rates to stabilize and inventory levels to improve, which should incentivize some buyers to reenter the market.”
An increase in PAPI indicates declining borrower affordability conditions and a decrease in PAPI shows improvement of affordability. Hitting a new record high last month, the national PAPI increased 0.5% to 172.3 in April from 171.5 in March. Compared with April 2022 (163.6), the index is up 5.3%. For home buyers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased to $1,430 in April from $1,411 in March.
Compared with $2,508 in March, the Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased to $2,445 in April.
The national mortgage payment to rent ratio decreased from 1.45 at the end of the fourth quarter of 2022 to 1.43 at the end of he first quarter of 2023, indicating mortgage payments for home purchases have decreased relative to rents. The Census Bureau’s HVS national median asking rent in the first quarter increased 10.5% on a quarterly basis to $1,462 ($1,322 in the fourth quarter of 2022).
The MBA’s PAPI also found:
- The national median mortgage payment is up $223 from one year ago, equal to an 11.8% increase;
- The national median mortgage payment for FHA loan applicants was $1,750 in April, down from $1,755 in March and up from $1,374 in April 2022;
- The national median mortgage payment for conventional loan applicants was $2,170, up from $2,145 in March and from $1,967 in April 2022;
- Home buyer affordability decreased for Black households, with the national PAPI increasing from 175.8 in March to 176.6 in April;
- Home buyer affordability decreased for Hispanic households, with the national PAPI increasing from 160.2 in March to 161.0 in April;
- Home buyer affordability decreased for White households, with the national PAPI increasing from 172.2 in March to 173.0 in April;
- The top five states with the highest PAPI were Idaho (255.6), Nevada (246.3), Arizona (226.1), Florida (216.6), and California (213.9); and
- The top five states with the lowest PAPI were North Dakota (116.4), Connecticut (124.4), Louisiana (129.3), West Virginia (131.9), and Washington, D.C. (133.5).
