MBA report shows second consecutive month of improved conditions for homebuyers
Homebuyers are getting a bit of relief as affordability conditions improved for the second consecutive month, according to the Mortgage Bankers Association (MBA).
The national median payment applied for by purchase applicants decreased to $2,167 from $2,219 in May.
MBA’s Purchase Applications Payment Index (PAPI), which tracks how new monthly mortgage payments vary relative to income, also dropped 2.4% to 170.9 in June. Despite a 0.2% increase in payments, strong earnings growth, which rose 3.9% compared to a year ago, means the PAPI is down 3.6% on an annual basis.
“Homebuyer affordability conditions improved for the second straight month as declining mortgage rates continue to increase purchasing power and is enticing some borrowers back into the housing market,” said Edward Seiler, associate vice president of housing economics at MBA and executive director of Research Institute for Housing America.
The median loan amount fell to $320,512 in June, signaling a moderation in home price growth, which Seiler expects to boost additional activity in the housing market.
For borrowers seeking lower-payment mortgages (25th percentile), the national mortgage payment decreased to $1,460 in June from $1,509 in May.
The Builders’ Purchase Application Payment Index (BPAPI) showed a slight decrease in the median mortgage payment for purchase mortgages, falling to $2,510 in June from $2,522 in May.
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State-by-state analysis revealed that Nevada, Idaho, Arizona, Rhode Island, and Utah had the highest PAPI, while Louisiana, West Virginia, New York, Alaska, and Washington D.C. had the lowest.
The report also highlighted changes in mortgage payments across different loan types:
- FHA loan applicants: $1,907 in June, down from $1,924 in May
- Conventional loan applicants: $2,180 in June, down from $2,226 in May
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