Homebuyer Affordability Improves As Median Payment Falls
By CU Today Staff —
WASHINGTON—Homebuyer affordability improved in July as the median mortgage payment sought by purchase applicants declined to $2,175 from $2,191 in June, according to the Mortgage Bankers Association’s Purchase Applications Payment Index.
The national index fell 1.3% to 155.8 from 157.9 in June. Although median payments were 2.2% higher than a year earlier, earnings grew 3.6%, producing a 1.3% annual improvement in affordability. The payment for borrowers seeking lower-cost mortgages declined to $1,512 from $1,522.
“Homebuyer affordability improved in July, as a decline in the median loan amount offset a modest increase in mortgage rates, bringing the typical mortgage payment down to $2,175,” said Edward Seiler, MBA’s associate vice president of housing economics and executive director of the Research Institute for Housing America. “Affordability also improved on an annual basis, as earnings growth continued to outpace the increase in mortgage payments.”
Median payments for conventional loan applicants fell to $2,184 from $2,209, while payments for FHA applicants increased to $1,901 from $1,872. Affordability improved for Black, Hispanic and White households, but mortgage payments continued to rise relative to rents during the second quarter, MBA reported.
Originally reported by CU Today.