Mortgage application payments declined in June, indicating improved affordability

Homebuyer affordability improved in June, as evidenced by the national median payment for purchase mortgage applicants decreasing to $2,172 — down from $2,211 in May.

That’s according to the Mortgage Bankers Association (MBA)’s 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.

An increase in the index equates to declining borrower affordability conditions, and the mortgage payment-to-income ratio is higher due to increasing application loan amounts, rising mortgage rates or a decrease in earnings.

Conversely, a decrease in the PAPI is indicative of improving borrower affordability conditions. It occurs when loan application amounts decrease, mortgage rates decrease or earnings increase.

“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’s 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.”

The national PAPI decreased 1.8% from May to June. Median earnings were up 4.6% compared to one year ago, and while payments increased 0.2%, the significant earnings growth means that the index is down — and affordability is better — by 4.2% on an annual basis.

For borrowers applying for lower-payment mortgages (the 25th percentile or lower), the national mortgage payment decreased to $1,500 in June, compared to $1,512 in May.

The Builders’ Purchase Application Payment Index showed that the median mortgage payment for purchase loans, derived from MBA’s Builder Application Survey, decreased to $2,273 in June, down from $2,328 in May.

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. For Federal Housing Administration (FHA) loan applicants, the median payment 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.

At the state level, the highest PAPI readings — indicating the lowest levels of affordability — were in Idaho (255.7), Nevada (249.5), Arizona (219.2), Rhode Island (206.9) and Utah (202.8).

Conversely, the states with the lowest index readings were Louisiana (116.9), Washington, D.C. (120.4), Connecticut (129.3), West Virginia (129.3) and Alaska (129.4).

MBA’s index also indicated that homebuyer affordability increased for Black households, Hispanic households and white households.