MBA: Mortgage Application Payments Decreased 1.4% to $2,173 in March
(Image courtesy of MBA)
Homebuyer affordability improved in March, with the national median payment applied for by purchase applicants decreasing to $2,173 from $2,205 in February. This is according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI), which measures how new monthly mortgage payments vary across time–relative to income–using data from MBA’s Weekly Applications Survey (WAS).
“Homebuyer affordability conditions improved slightly in March as lower mortgage rates spurred renewed activity in the housing market,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. “Despite improving conditions in March, the outlook in the upcoming months is cloudier. Ongoing affordability concerns, declining consumer confidence, and volatility in the financial markets could all put downward pressure on homebuyer demand.”
An increase in MBA’s PAPI–indicative of declining borrower affordability conditions–means that the mortgage payment to income ratio (PIR) is higher due to increasing application loan amounts, rising mortgage rates, or a decrease in earnings. A decrease in the PAPI–indicative of improving borrower affordability conditions–occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.
The national PAPI (Figure 1) decreased 1.4% to 164.1 in March from 166.5 in February. Median earnings were up 4.8% compared to one year ago, and while payments decreased 1.3%, the significant earnings growth means that the PAPI is down (affordability is higher) 5.8% on an annual basis. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,499 in March from $1,506 in February.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased to $2,288 in March from $2,463 in February.
Additional Key Findings of MBA’s Purchase Applications Payment Index (PAPI) – March 2025
• The national median mortgage payment was $2,173 in March 2025—down $32 from February. It is down by $28 from one year ago, equal to a 1.3% decrease.
• The national median mortgage payment for FHA loan applicants was $1,872 in March, down from $1,907 in February and $1,898 in March 2024.
• The national median mortgage payment for conventional loan applicants was $2,200, down from $2,226 in February and $2,222 in March 2024.
• The top five states with the highest PAPI were: Idaho (245.6), Nevada (242.6), Arizona (221.0), Florida (204.2), and Utah (203.5).
• The top five states with the lowest PAPI were: Louisiana (125.1), Connecticut (125.4), Washington, D.C. (128.8), New York (129.1), and West Virginia (130.3).
• Homebuyer affordability increased for Black households, with the national PAPI decreasing from 164.2 in February to 161.8 in March.
• Homebuyer affordability increased for Hispanic households, with the national PAPI decreasing from 157.8 in February to 155.5 in March.
• Homebuyer affordability increased for White households, with the national PAPI decreasing from 168.2 in February to 165.7 in March.
About MBA’s Purchase Applications Payment Index
The Mortgage Bankers Association’s Purchase Applications Payment Index (PAPI) measures how new mortgage payments vary across time relative to income. Higher index values indicate that the mortgage payment to income ratio (PIR) is higher than in a month where the index is lower. Contrary to other affordability indexes that make multiple assumptions about mortgage underwriting criteria to estimate mortgage payment level, PAPI directly uses MBA’s Weekly Applications Survey (WAS) data to calculate mortgage payments.
PAPI uses usual weekly earnings data from the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS). Usual weekly earnings represent full-time wage and salary earnings before taxes and other deductions and include any overtime pay, commissions, or tips usually received. Note that data are not seasonally adjusted.
MBA’s Builders’ Purchase Application Payment Index (BPAPI) uses MBA’s Builder Application Survey (BAS) data to create an index that measures how new mortgage payments vary across time relative to income, with a focus exclusively on newly built single-family homes. As with PAPI, higher index values indicate that the mortgage payment to income ratio (PIR) is higher than in a month where the index is lower. To create BPAPI, principal and interest payment amounts are deflated by the same earnings series as in PAPI.
The rent data series calculated for MBA’s national mortgage payment to rent ratio (MPRR) comes from the U.S. Census Bureau’s Housing Vacancies and Homeownership (HVS) survey’s median asking rent. The HVS data is quarterly, and as such, the mortgage payment to rent ratio will be updated quarterly. March 2025 MPRR data was not included in this release.
For additional information on MBA’s Purchase Applications Payment Index, click here.
