Homebuyers received a modest reprieve in February as the national median mortgage payment applied for by purchase applicants decreased, signaling a slight improvement in affordability.
The national median payment dropped to $2,061 last month, down from the record $2,070 recorded in January, according to data released Thursday by the Mortgage Bankers Association (MBA).
The MBA’s Purchase Application Index (PAPI) — a metric designed to measure how new monthly mortgage payments vary across time relative to income — demonstrates that buyers are in a measurably stronger position than they were 12 months ago.
February’s median payment was $144 lower than the $2,205 payment recorded the prior year, reflected by the PAPI dropping to an even 150 last month from 166.2 in February 2025. A decrease in the index indicates improving borrower affordability.
The year-over-year progress is largely attributable to a combination of a temporary dip in mortgage rates during the early months of the year and steady wage growth across the broader economy.
“The February PAPI declined over the month and is nearly 10% lower than a year ago, reflecting both reduced payments and steady income growth,” said Edward Seiler, MBA’s associate vice president of housing economics and executive director of the Research Institute for Housing America, in a statement accompanying the report.
This dynamic has provided tangible relief to prospective homebuyers, helping to offset financial pressure even as average loan sizes increased slightly during the same period.
However, Seiler warned that this window of improved affordability may prove to be fleeting. While February’s data paints a positive picture for prospective homebuyers, the macroeconomic landscape has shifted rapidly since the period covered by this data.
“Unfortunately, this month’s turmoil in the Middle East has put upward pressure on mortgage rates, which in turn could impact overall affordability in the months ahead,” he said.
Mortgage rates have been climbing in response to the Iran war’s shock on energy markets. The 30-year fixed-rate mortgage averaged 6.38% for the seven-day period ending Thursday, according to Freddie Mac, a gain of 27 basis points over the preceding two weeks.
This uptick in borrowing costs has already begun chilling market activity. The rising rates triggered a sharp 10.5% drop in recent mortgage application volumes for the week ending March 20, suggesting that the affordability gains realized in February are quickly being eroded by the higher cost of financing as the spring homebuying season begins.
