MBA: Mortgage Application Payments Decreased in June
Homebuyer affordability improved in June, with the national median payment applied for by purchase applicants decreasing to $2,172 from $2,211 in May, according to the Mortgage Bankers Association’s Purchase Applications Payment Index.
The index measures how new monthly mortgage payments vary across time – relative to income – using data from MBA’s Weekly Applications Survey.
“Affordability conditions improved in June, a positive sign for prospective homebuyers looking to take advantage of slightly lower mortgage rates and moderating home prices,” said Edward Seiler, MBA associate vice president of housing economics and executive director of the Research Institute for Housing America. “The median purchase application amount decreased to $324,800, and we expect that home-price growth will continue to stabilize as more inventory comes onto the market in many parts of the country.”
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 1.8 percent to 163.7 in June from 166.6 in May. Median earnings were up 4.6 percent compared to one year ago, and while payments increased 0.2 percent, the significant earnings growth means that the PAPI is down (affordability is higher) 4.2 percent on an annual basis. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,500 in June from $1,512 in May.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased to $2,273 in June from $2,328 in May.
Additional Key Findings of MBA’s Purchase Applications Payment Index (PAPI) – June 2025
• The national median mortgage payment was $2,172 in June 2025—down $39 from May. It was up by $5 from one year ago, equal to a 0.2% increase.
• The national median mortgage payment for FHA loan applicants was $1,881 in June, down from $1,927 in May and down from $1,907 in June 2024.
• The national median mortgage payment for conventional loan applicants was $2,205, down from $2,235 in May and up from $2,180 in June 2024.
• The top five states with the highest PAPI were: Idaho (255.7), Nevada (249.5), Arizona (219.2), Rhode Island (206.9), and Utah (202.8).
• The top five states with the lowest PAPI were: Louisiana (116.9), Washington, D.C. (120.4), Connecticut (129.3), West Virginia (129.3), and Alaska (129.4).
• Homebuyer affordability increased for Black households, with the national PAPI decreasing from 166.1 in May to 163.1 in June.
• Homebuyer affordability increased for Hispanic households, with the national PAPI decreasing from 155.2 in May to 152.4 in June.
• Homebuyer affordability increased for White households, with the national PAPI decreasing from 167.8 in May to 164.8 in June.
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. May 2025 MPRR data was not included in this release.
For additional information on MBA’s Purchase Applications Payment Index, click here.
