The median payment applied for by home purchase mortgage applicants nationwide rose from $2,201 to $2,256, according to the Mortgage Bankers Association (MBA).
The 2.4% increase reported in the industry organization’s latest Purchase Applications Payment Index (PAPI) data reflects the ongoing affordability crisis keeping many homebuyers on the sidelines and stagnating housing market activity. Year over year, the national median mortgage payment is up $144, an increase of 6.8%.
For FHA loans, used by many first-time homebuyers, the increase is even larger. The national median mortgage payment for FHA loan applicants in April was $1,955, up from $1,898 (a 3.0% increase) in March and from $1,750 (11.7%) in April 2023. Payments for loans at low price tiers increased as well; for borrowers applying for lower-payment mortgages, the national payment rose from $1,488 in March to $1,537 in April, a 3.3% increase.
The MBA also reported that the national mortgage payment to rent ratio increased during the first quarter, meaning purchase mortgage payments have increased relative to rents. The ratio, which was at 1.40 at the end of the fourth quarter of 2023, grew to 1.50 at the end of the first quarter of 2024.
“Homebuyer affordability conditions declined further as mortgage rates remained above 7 percent in April, sidelining many prospective buyers from entering the housing market,” said Edward Seiler, associate vice president, housing economics at the MBA and executive director of the Research Institute for Housing America. “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.”
The PAPI, which tracks the fluctuations of monthly mortgage payments relative to income, rose as a result of April’s payment fluctuations, indicating lowered borrower affordability. The national PAPI reading stood at 176.8 in April, up 1.5% from March and up 2.1% annually. Median earnings grew by 4.6% year over year, partially offsetting the annual increase in payments.
