Mortgage Application Payments Decrease in August
Homebuyer affordability improved in August, with the national median payment applied for by purchase applicants decreasing to $2,100 from $2,127 in August, according to the Mortgage Bankers Association’s Purchase Applications Payment Index.
MBA’s PAPI measures how new monthly mortgage payments vary across time – relative to income – using data from MBA’s Weekly Applications Survey.
“Affordability conditions have improved for four straight months, with lower mortgage rates and stronger income growth boosting prospective buyers’ purchasing power,” said Edward Seiler, MBA’s associate vice president of housing economics and Executive Director of the Research Institute for Housing America.
Seiler said MBA expects that moderating home-price appreciation, coupled with lower rates, will continue to ease affordability constraints and help to boost activity in the housing market.
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 1.2 percent to 157.5 in August from 159.4 in July. Median earnings were up 3.2 percent compared to one year ago, and while payments increased 2.1 percent, the significant earnings growth means that the PAPI is down (affordability is higher) 1.1 percent on an annual basis. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,445 in August from $1,468 in July.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased to $2,210 in August from $2,233 in July.
Additional Key Findings of MBA’s Purchase Applications Payment Index (PAPI) – August 2025
• The national median mortgage payment was $2,100 in August 2025—down $27 from July. It was up by $43 from one year ago, equal to a 2.1% increase.
• The national median mortgage payment for FHA loan applicants was $1,863 in August, down from $1, 865 in July but up from $1,817 in August 2024.
• The national median mortgage payment for conventional loan applicants was $2,112, down from $2,160 in July but up from $2,056 in August 2024.
• The top five states with the highest PAPI were: Idaho (256.5), Nevada (241.9), Arizona (214.0), Rhode Island (208.3), and Utah (205.0).
• The top five states with the lowest PAPI were: Alaska (115.1), Louisiana (115.3), D.C. (117.2), Connecticut (121.7), and New York (123.6).
• Homebuyer affordability increased for Black households, with the national PAPI decreasing from 158.9 in July to 156.9 in August.
• Homebuyer affordability increased for Hispanic households, with the national PAPI decreasing from 148.5 in July to 146.6 in August.
• Homebuyer affordability increased for White households, with the national PAPI decreasing from 160.5 in July to 158.5 in August.
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. The MPRR data was not featured in the August 2025 data.
Click here for additional information on MBA’s Purchase Applications Payment Index.
