Chart of the Week: Purchase Applications Payment Index for Selected States

Sources: MBA Weekly Applications Survey and U.S. Bureau of Labor Statistics.

MBA’s Purchase Applications Payment Index (PAPI) shows that national affordability conditions improved each month from May to August. This recent trend in PAPI, which measures how new purchase mortgage payments vary over time relative to income, means that the index has decreased by 13% from the series high of 177.9 in April 2024 to 157.5 in August (red line on chart). This is welcome news for home purchasers, although an index of 157.5 means that principal and interest payments are still up 57.5% in real terms since March 2012.

In this week’s Chart of the Week, we show the PAPI series – constructed using median Weekly Applications Survey (WAS) payments and median income – for the nation and six selected states.

The two states with the highest PAPI, Idaho (brown line) and Nevada (light blue line), remain two-and-a-half times more expensive, in real terms, than they were in March 2012. Despite this eroded affordability, Federal Housing Finance Agency house price data shows that Idaho still has house prices growing at 4.3% as of the second quarter of 2025, although Nevada’s house price growth has moderated to 2.0% (versus national house price growth of 2.9%).

The PAPI series in California (gray line) and Texas (dark blue line) have come down by 18.4% and 12.6% over the last two years. On the other hand, the PAPI series for Pennsylvania (green line) and Connecticut (orange line) are only moderately down by 2.8% and 3.2% over this period, and these series have not reversed their upward trends starting in mid-2022.

Preliminary PAPI results for September will be released at MBA’s Annual Convention and Expo. MBA Weekly Applications Survey data show that contract interest rates were down 27 bps from August to 6.42% in September, and MBA’s house price growth forecast for the third quarter, at 1.8%, predicts continued moderation in house price appreciation. Furthermore, earnings growth has remained above 3% (although, September data was not released last Friday by the Bureau of Labor Statistics due to the federal government shutdown). Taking these three tidbits together, it is likely that the results presented later this month will show further improvements in affordability for home purchasers.

– Eddie Seiler (eseiler@mba.org)