Homebuying affordability saw a slight improvement in March, with the median monthly mortgage payment applied for by home purchase applicants in the U.S. decreasing 1.5% to $2,173 from February’s mark of $2,205, according to a report from the Mortgage Bankers Association (MBA).
The association’s Purchase Applications Payment Index (PAPI) — which measures mortgage application payments relative to borrowers’ income — declined 1.4% last month, which indicates that affordability conditions improved.
“Homebuyer affordability conditions improved slightly in March as lower mortgage rates spurred renewed activity in the housing market,” Edward Seiler, MBA’s associate vice president of housing economics, said in a press release. “Despite improving conditions in March, the outlook in the upcoming months is cloudier. Ongoing affordability concerns, declining consumer confidence and volatility in the financial markets could all put downward pressure on homebuyer demand.”
For conventional loan applicants, the national median mortgage payment was $2,200 in March, down from $2,226 in February. For Federal Housing Administration loans, the median payment was $1,872 in March compared to $1,907 the prior month.
On a year-over-year basis, the median mortgage payment for all borrowers was down 1.3% in March and median earnings were up 4.8%, resulting in improved homebuying affordability over the past year and a 5.8% decline in the PAPI index.
