Mba: Mortgage Application Payments Dropped For A Fourth Straight Month

Homebuyer affordability improved in August and marked the fourth straight month of improvement, with the national median payment applied for by purchase mortgage applicants decreasing to $2,100, down from $2,127 in July.

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.

“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.

“MBA is expecting that moderating home-price appreciation, coupled with lower rates, will continue to ease affordability constraints and help to boost activity in the housing market.”

The national PAPI decreased 1.2% from July to August. An increase in MBA’s PAPI signals reduced borrower affordability as mortgage payments take up a larger share of income, while a decrease indicates improved affordability as the share declines.

Median borrower earnings were up 3.2% compared to one year ago, and while payments increased 2.1%, the significant earnings growth means that the PAPI is down (affordability is higher) 1.1% on an annual basis.

For borrowers applying for lower-payment mortgages (the 25th percentile or less), the national mortgage payment decreased to $1,445 in August, down from $1,468 in July.

The Builders’ Purchase Application Payment Index showed that the median mortgage payment for purchase mortgages from the MBA’s Builder Application Survey decreased to $2,210 in August, down from $2,233 in July.

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.

For Federal Housing Administration (FHA) loan applicants, the national median mortgage payment 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 five states with the highest PAPI readings were Idaho (256.5), Nevada (241.9), Arizona (214.0), Rhode Island (208.3) and Utah (205.0).

The states with the lowest PAPI were Alaska (115.1), Louisiana (115.3), Washington, D.C. (117.2), Connecticut (121.7) and New York (123.6).

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