Mortgage affordability improves in June as median payment slips to $2,191

Homebuyer affordability improved slightly in June as the national median payment on new purchase mortgage applications fell to $2,191, down from $2,198 in May, according to the Mortgage Bankers Association (MBA)’s Purchase Applications Payment Index (PAPA). The index tracks how new monthly mortgage payments change over time relative to household income using MBA’s Weekly Applications Survey. MBA reported that the national PAPI declined 0.3% to a reading of 157.9 in June, down from 158.4 in May. Edward Seiler, MBA‘s associate vice president of housing economics and executive director of the Research Institute for Housing America, said in the association’s announcement that lower application loan amounts are offsetting rises in mortgage rates, pulling the median payment down by $7 from May. At the same time, household earnings growth of 4.6% over the past year left the index 3.5% lower on an annual basis, meaning mortgage payments are consuming a smaller share of income than a year ago despite remaining historically elevated. For borrowers seeking lower-payment loans at the 25th percentile, the national median payment declined to $1,522 in June, down from $1,532 in May. Affordability...