MBA: Mortgage Application Payments Decreased in December
Homebuyer affordability improved slightly in December, with the national median payment applied for by purchase applicants decreasing to $2,025 from $2,034 in November. 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).
“Housing affordability conditions improved for the seventh consecutive month to close out 2025 because of lower mortgage rates and steady household earnings growth,” said Edward Seiler, MBA’s Associate Vice President of Housing Economics and Executive Director of the Research Institute for Housing America. “MBA expects that moderating home-price appreciation, combined with even lower mortgage rates, will continue to gradually ease affordability constraints and support increased housing market activity.”
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 0.5% to 148.8 in December from 149.5 in November. While payments decreased 4.8%, earnings growth of 2.9%means that the PAPI is down (affordability is higher) 7.5% on an annual basis. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased to $1,413 in December from $1,409 in November.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey increased to $2,173 in December from $2,157 in November.
Additional Key Findings of MBA’s Purchase Applications Payment Index (PAPI) – December 2025
• The national median mortgage payment was $2,025 in December 2025—down $9 from November. It was down by $102 from one year ago, equal to a 4.8% decrease.
• The national median mortgage payment for FHA loan applicants was $1,802 in December, up from $1,776 in November and down from $1,866 in December 2024.
• The national median mortgage payment for conventional loan applicants was $2,036, down from $2,063 in November and down from $2,128 in December 2024.
• The top five states with the highest PAPI were: Nevada (235.8), Idaho (232.5), Arizona (197.6), Rhode Island (193.3), and Florida (187.9).
• The top five states with the lowest PAPI were: Louisiana (109.2), Vermont (115.2), Washington, D.C. (115.5), Connecticut (116.2), and New York (119.5).
• Homebuyer affordability increased for Black households, with the national PAPI decreasing from 154.5 in November to 153.8 in December.
• Homebuyer affordability increased for Hispanic households, with the national PAPI decreasing from 141.8 in November to 141.1 in December.
• Homebuyer affordability increased for White households, with the national PAPI decreasing from 151.2 in November to 150.5 in December.
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.
For additional information on MBA’s Purchase Applications Payment Index, click here.
