After seven consecutive months of improving mortgage affordability, the Mortgage Bankers Association (MBA) reported Thursday that new monthly payments for home loans originated in January increased nationwide compared to December levels.

The median payment applied for by homebuyers seeking a mortgage last month rose to $2,070 from $2,025 in December, a roughly 2.2% increase over the month, according to the MBA’s Purchase Applications Payment Index (PAPI), an income-sensitive measure of variations in new mortgage payments. 

Reflecting consistent gains in mortgage affordability over the past 12 months, however, January’s median new mortgage payment was $135, or about 6.1% lower than year-ago levels.

“While the median purchase application amount rose from $320,000 to $332,000, mortgage rates declined over the month,” noted Edward Seiler, associate vice president of housing economics at the MBA, in analysis accompanying Thursday’s data release.

The Trump administration’s announcement that Fannie Mae and Freddie Mac would purchase $200 billion in mortgage-backed securities briefly pushed average rates on 30-year fixed-rate mortgages below 6% in early January, though mortgage spreads have reset wider amid unclear execution of the MBS purchase plan.

The national PAPI rose 1% in January to 150.3, up from 148.8 in December. An increase in the index indicates declining borrower affordability.

“While payments decreased 6.1%, earnings growth of 4% means that the PAPI is down (affordability is higher) 9.7% on an annual basis,” the MBA emphasized. Borrowers applying for mortgages falling within the lowest 25% of new payment amounts saw their median outlay rise to $1,445 in January from $1,413 in December. 

“With mortgage rates mostly trending downward, and home-price growth flat or down in many markets, affordability conditions should improve in the months ahead as housing inventory increases,” added Seiler.

National median mortgage payments for loans backed by the Federal Housing Administration declined to $1,782 in January from $1,802 in December, reflecting roughly 7.8% lower payments than $1,934 in January 2025.

National median mortgage payments for conventional loans that satisfy the underwriting guidelines of Fannie Mae and Freddie Mac increased to $2,081 in January from $2,036 during December, reflecting a nearly 6.5% lower payment than $2,225 a year ago.