House hunters financing their home purchases with mortgages continued to see incremental improvement in affordability last month, according to estimates released Thursday by the Mortgage Bankers Association (MBA).
The national median payment applied for by purchase applicants declined to $2,034 in November from $2,039 in October, an improvement of $99 from November 2024.
The MBA attributed the marginal gains to lower mortgage rates and growth in household earnings that have boosted buyers’ purchasing power.
“Affordability conditions have now improved for six straight months,” said Edward Seiler, associate vice president of housing economics for the MBA, which tracks monthly changes in mortgage affordability via its Purchase Applications Payment Index (PAPI).
The PAPI measures new monthly mortgage payments applied for by prospective borrowers, relative to income. An increase in the index indicates declining borrower affordability.
While payments declined 4.6% on an annual basis in November, earnings grew 2.9%, pushing the PAPI down 7.3% from a year ago. The national PAPI decreased 0.2% to 149.6 in November from 149.8 the previous month.
Seiler added that affordability conditions will likely continue to improve in 2026, driven by “house prices forecast to fall nationally by 0.3%.” The MBA has predicted that mortgage rates will remain around 6.4% next year, near current levels.
The median application payment for loans backed by the Federal Housing Administration was $1,776 in November, down from $1,789 in October and $1,898 in November 2024.
States with the lowest PAPI readings indicating the best mortgage affordability in November were Louisiana (106.7), Connecticut (112.4), West Virginia (119.9), New York (121.4) and Maryland (122.1). States with the highest PAPI readings denoting the worst mortgage affordability were Idaho (230.7), Nevada (226.3), Arizona (207.6), Rhode Island (198.7) and Utah (197.1).
The MBA also reported Thursday that mortgage purchase payments have decreased relative to rents, with the association’s mortgage payment-to-rent ratio declining from 1.45 at the end of the second quarter to 1.35 at the end of the third quarter.
