Mortgage Payments Decrease Slightly In November

Homebuyer affordability improved slightly in November as the national median monthly mortgage payment for purchase applicants dropped to $2,034, down $5 from October, according to the Mortgage Bankers Association (MBA)’s Purchase Applications Payment Index (PAPI) released Thursday.

On an annual basis, payments were down by $99, equal to a 4.6% decrease.

MBA’s PAPI, which tracks changes over time in new monthly mortgage payments relative to income, uses data from the trade group’s weekly applications survey. The PAPI fell 0.2% to a reading of 149.6, marking a sixth consecutive monthly improvement.

“Affordability conditions have now improved for six straight months as lower mortgage rates and strong household earnings growth have increased 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.

Seiler said the MBA expects that affordability conditions will “continue to improve in 2026, with house prices forecast to fall nationally by 0.3% and mortgage rates forecast to remain around 6.4% throughout the year.”

An increase in MBA’s PAPI signals worsening borrower affordability, reflecting a higher mortgage payment-to-income ratio driven by larger loan amounts, higher mortgage rates or lower earnings.

A decrease in the index indicates improving affordability, typically resulting from smaller loan amounts, lower mortgage rates or rising earnings.

For lower-payment borrowers at the 25th percentile or below, the national median payment rose to $1,409 in November, up from $1,402 in October.

Mortgage payments also declined relative to rents. MBA’s mortgage-payment-to-rent-payment ratio fell to 1.35 in the third quarter, down from 1.45 in the second quarter, as the national median asking rent rose to $1,534, according to U.S. Census Bureau data.

By loan type, the median payment for Federal Housing Administration (FHA) applicants fell to $1,776 in November, down from $1,789 in October and $1,898 a year ago. The median payment for conventional loan applicants was $2,063, unchanged from September and down from $2,133 in November 2024.

Idaho (230.7), Nevada (226.3), Arizona (207.6), Rhode Island (198.7) and Utah (197.1) posted the highest PAPI readings, while Louisiana (106.7), Connecticut (112.4), West Virginia (119.9), New York (121.4) and Maryland (122.1) had the lowest readings.

Affordability also improved modestly for Black, Hispanic and white households, with PAPI readings declining across all three groups in November.