“In addition to lower mortgage rates, more housing inventory is desperately needed in markets throughout the country this summer to alleviate these tough affordability conditions,” said Edward Seiler, associate vice president of housing economics at MBA and executive director of Research Institute for Housing America.
The national PAPI rose 1.5% month-over-month to 176.8 in April. An increase in the PAPI indicates a higher mortgage payment-to-income ratio due to factors like rising loan amounts, higher rates or stagnant earnings.
While mortgage payments were up 6.8% annually, strong earnings growth of 4.6% year-over-year meant the overall PAPI increased a more modest 2.1% from April 2023 levels.
For borrowers applying for loans in the 25th percentile for payment size, the median mortgage payment climbed to $1,537 in April from $1,488 the prior month.
The median payment on new home purchase loans measured by MBA’s Builder Application Survey Index also increased, rising to $2,604 in April from $2,556 in March.
