U.S. Homebuyer Affordability Improves for Fourth Straight Month
Mortgage Payments Ease in August say the MBA: The overall homebuyer affordability has improved, largely due to falling mortgage rates and rising incomes. There was a decrease in the Purchase Applications Payment Index (PAPI) by 1.2% to 157.5, indicating better affordability. The median monthly payment witnessed a drop to $2,100 in August, while median earnings increased by 3.2% YoY. Despite the improvements, the payments remain $43 above the rates from the last year.
View from Edward Seiler, MBA’s Associate Vice President for Housing Economics: Edward Seiler attributes the ongoing affordability improvement to various factors experienced over the past four months.
Loan Type and Demographic Trends:
- Affordability changes were observed across loan types and demographic factors. They were distinctly noted in median monthly payments for FHA and conventional applications, and different racial/ethnic groups.
Regional Breakdown:
- Affordability pressures differed significantly among states. The top five states with the highest and lowest affordability pressures were listed, featured with their respective PAPI values.
