Chart of the Week: Purchase Applications Payment Index for Selected States
July 30’s release of the June 2026 results for MBA’s Purchase Applications Payment Index (PAPI) shows that, although national affordability conditions have worsened somewhat since the start of the Iran conflict, the longer-term trend over the past three years has been one of gradual improvement. PAPI, which measures the relationship between new purchase mortgage principal and interest payments and household income, declined from 177.2 in June 2023 to 170.9 in June 2024, 163.7 in June 2025, and 157.9 in June 2026 (red line on chart).
Over the past 12 months, the median loan amount for a 30-year fixed-rate mortgage application in MBA’s Weekly Applications Survey (WAS) increased 3.7%, from $324,800 to $336,785. However, a 27-basis-point decline in mortgage rates, combined with a 4.6% increase in median usual weekly earnings, more than offset the increase in loan size, resulting in a 3.5% decline in the PAPI. Which means that, while real principal and interest payments remain 57.9% higher than their March 2012 level, they have fallen 3.5% over the past year and 10.9% over the past three years.
In this week’s Chart of the Week, we show the PAPI series – constructed using median WAS payments and median income – for the nation and six selected states. The two states with the highest PAPI values, Idaho (dark green line) and Nevada (light blue line), remain 2.5 and 2.3 times greater, in real terms, than they were in March 2012. The encouraging news is that affordability has improved from recent peaks. Idaho’s PAPI has declined 10.3% from its series high of 280.0 in September 2023, while Nevada’s PAPI has fallen 17.3% from its peak in October 2022.
Affordability has also improved meaningfully in several large states. The PAPI in California (gray line) and Texas (dark blue line) has declined 20.0% and 15.9%, respectively, over the past three years. In contrast, Connecticut (orange line) has experienced only a modest improvement in affordability, with its PAPI falling just 1.0% over the same period. Pennsylvania (light green line), meanwhile, has seen a slight deterioration in affordability, as its PAPI has increased 0.7%.
MBA’s latest forecast indicates that mortgage rates are likely to remain near 6.5% over the next several years, while house price growth is expected to be negative in real terms. Combined with recent economic data suggesting that the U.S. labor market remains relatively healthy, with employment continuing to grow at a steady albeit moderating pace, these conditions should support a continued gradual improvement in housing affordability.
- Edward Seiler (eseiler@mba.org)
