New purchase mortgage payments rose as expected in March amid higher borrowing costs from Iran war pressures, according to newly released data from the Mortgage Bankers Association (MBA).
The national median payment applied for by purchase applicants last month jumped to $2,131 from $2,061 in February, a 3.4% monthly increase that puts monthly payments just 2% lower than a year ago.
What so far has been a choppy run for mortgage affordability in 2026 continued into March.
After rising on a monthly basis in January, typical new mortgage payments declined in February as average mortgage rates for 30-year fixed-rate mortgages eased below 6%. The MBA cautioned at the time, however, that oil and trade disruptions could “impact affordability in the months ahead.”
Overall, the MBA’s Purchase Applications Payment Index (PAPI), which tracks how new monthly mortgage payments vary relative to income, rose to 154.9 from 149.8 the previous month. An increase in the index indicates declining borrower affordability.
The MBA cited Bureau of Labor Statistics data showing annual weekly earnings growth about 3.9% higher in March, contributing to higher affordability of about 5.6% from a year ago, nevertheless. Seven consecutive months of declining new mortgage payments was snapped at the start of 2026.
“Homebuyer affordability conditions declined in March, as rising mortgage rates and higher loan amounts continued to stretch household budgets,” noted Edward Seiler, associate vice president of housing economics at the MBA, in analysis accompanying Thursday’s data release.
The national median mortgage payment for conventional loan applicants seeking financing backed by Fannie Mae or Freddie Mac rose 2.7% in March from February levels, landing at $2,145 and down only 2.5% from a year ago. The national median mortgage payment for loans insured by the Federal Housing Administration (FHA) was 2.8% higher in March at $1,812, down 3.2% from a year ago.
A related MBA index updated Thursday, the Builders’ Purchase Application Payment Index (BPAPI), which tracks parallel payment measures across new-home purchase applications, showed the median new-home new mortgage payment increased 2.45% to $2,210 in March from $2,157 in February.
Despite the increase, the MBA has separately reported that mortgage demand for newly built homes exploded in March, jumping 26% from February and 11% over the year. New-home mortgage demand was only 0.9% higher over the year in February.
Applications for government-insured mortgages backed by the FHA and the Department of Veterans Affairs comprised more than 50% of overall new-home purchase applications for the third consecutive month, the MBA reported.
Seiler further described the mortgage affordability decline in March as “broad-based” and cutting across 44 states, influenced by the rise in mortgage rates but also an increase in median purchase application amounts to $335,000.
States with the highest PAPI readings in March, indicating markets with the worst relative mortgage affordability, were Idaho, Nevada, Rhode Island, Arizona and Florida. The lowest PAPI scores last month were seen in Louisiana, Washington, D.C., Connecticut, New York and Alaska.
“Looking ahead, while these headwinds may temper demand in the near term,” Seiler concluded, “improvements in housing supply and moderating home-price growth could help restore some stability to the housing market.”
