Despite mortgage rates rising to year-ago levels last month, new monthly mortgage payments applied for in July declined from June levels, the Mortgage Bankers Association (MBA) reported Thursday.

After slipping $7 lower from May to June, typical new mortgage payment amounts decreased by an additional $16 in July to land at $2,175, according to the MBA’s Purchase Applications Payment Index (PAPI), which tracks new monthly mortgage payments over time relative to income.

The decline was attributed to a drop in median loan amounts as home prices have softened on a regional basis across the U.S., particularly concentrated in the South and West.

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“Looking ahead, we expect affordability conditions to remain closely tied to the path of mortgage rates and home-price growth,” explained Edward Seiler, associate vice president of housing economics at the MBA, in a statement accompanying the figures.

The national PAPI decreased 1.3% to 155.8 in July from 157.9 in June, reflecting an improvement in affordability. PAPI combines data from MBA’s weekly applications survey with weekly earnings data from the U.S. Bureau of Labor Statistics to measure payment burdens relative to income. A drop in the index indicates better affordability.

Nevertheless, median new mortgage payments in July were $48 higher than a year ago, as rising mortgage rates since February have steadily eroded purchasing power. MBA reporting shows average rates for 30-year fixed-rate loans hovered just below 6.8% last week and have remained above year-ago levels since late July.

Thursday’s index update showed median mortgage payments for conventional loan applicants seeking mortgages approved by Fannie Mae and Freddie Mac were $2,184, up $24 from a year ago but down $25 from June.

New monthly mortgage payments for loans insured by the Federal Housing Administration, meanwhile, were $1,901 in July, up $29 from June and $36 higher than a year ago. New mortgage payments on new-home purchases also rose from June, increasing $11 to $2,210 in July.

States and state equivalents with the lowest PAPI last month — signaling the best relative mortgage affordability — were Louisiana, Washington, D.C., North Dakota, Alaska and Connecticut. Idaho, Nevada, Rhode Island, Arizona and Florida had the highest state PAPIs.