Mortgage Application Payments Increase in May
(Image courtesy of Alin Serban/pexels.com; Charts via MBA)
Homebuyer affordability declined further in May, with the national median payment applied for by purchase applicants increasing to $2,211 from $2,186 in April. 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 declined in May as mortgage rates near 7% continued to put upward pressure on prospective homebuyers’ budgets,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. “Despite current affordability constraints, many homebuyers are still eager to enter the housing market. Rising inventory levels and moderating home-price growth have both been bright spots during this year’s spring homebuying season.”
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 increased 1% to 164.9 in May from 163.0 in April. Median earnings were up 5.8% compared to one year ago, and while payments decreased 0.4%, 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 increased to $1,512 in May from $1,497 in April.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey increased to $2,328 in May from $2,306 in April.
Additional Key Findings of MBA’s Purchase Applications Payment Index (PAPI) – May 2025
• The national median mortgage payment was $2,211 in May 2025—up $25 from April. It is down by $8 from one year ago, equal to a 0.4% decrease.
• The national median mortgage payment for FHA loan applicants was $1,927 in May, up from $1,895 in April and up from $1,924 in May 2024.
• The national median mortgage payment for conventional loan applicants was $2,235, up from $2,206 in April and up from $2,226 in May 2024.
• The top five states with the highest PAPI were: Idaho (260.4), Nevada (247.5), Arizona (224.9), Rhode Island (215.9), and Utah (207.9).
• The top five states with the lowest PAPI were: Louisiana (119.6), Connecticut (132.9), Alaska (133.6), New York (134.4), and Iowa (135.8).
• Homebuyer affordability decreased for Black households, with the national PAPI increasing from 160.7 in April to 162.6 in May.
• Homebuyer affordability decreased for Hispanic households, with the national PAPI increasing from 154.5 in April to 156.2 in May.
• Homebuyer affordability decreased for White households, with the national PAPI increasing from 164.7 in April to 166.5 in May.
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. The HVS data is quarterly, and as such, the mortgage payment to rent ratio will be updated quarterly. MPRR data was not included in May 2025 data.
For additional information on MBA’s Purchase Applications Payment Index, click here.
