Mortgage affordability improves in June as median payment slips to $2,191

Homebuyer affordability improved slightly in June as the national median payment on new purchase mortgage applications fell to $2,191, down from $2,198 in May, according to the Mortgage Bankers Association (MBA)’s Purchase Applications Payment Index (PAPA).

The index tracks how new monthly mortgage payments change over time relative to household income using MBA’s Weekly Applications Survey. MBA reported that the national PAPI declined 0.3% to a reading of 157.9 in June, down from 158.4 in May.

Edward Seiler, MBA‘s associate vice president of housing economics and executive director of the Research Institute for Housing America, said in the association’s announcement that lower application loan amounts are offsetting rises in mortgage rates, pulling the median payment down by $7 from May.

At the same time, household earnings growth of 4.6% over the past year left the index 3.5% lower on an annual basis, meaning mortgage payments are consuming a smaller share of income than a year ago despite remaining historically elevated.

For borrowers seeking lower-payment loans at the 25th percentile, the national median payment declined to $1,522 in June, down from $1,532 in May.

Affordability varies by loan type and geography

The June data shows only marginal changes by loan product. The national median mortgage payment for Federal Housing Administration (FHA) borrowers slipped to $1,872 — down from $1,873 in May and $1,881 in June 2025. For conventional loan applicants, the median payment ticked down $2 from May to $2,209, although that was up slightly from $2,205 a year earlier.

Affordability pressures remain most acute in Western markets. The five highest state-level PAPI readings were in Idaho (251.2), Nevada (230.4), Arizona (209.7), Rhode Island (208.7) and Utah (195.8). The lowest readings were in Louisiana (119.6), Washington, D.C. (122.0), Vermont (126.7), New York (128.1) and West Virginia (129.3), indicating relatively better payment-to-income ratios in these states.

MBA also tracks affordability by race and ethnicity. In June, the national PAPI declined for all three groups reported, suggesting modest improvement for each. For Black households, the index fell to 158.5, down from 159.0; for Hispanic households, it slipped from 146.6 to 146.1; and for White households, it declined from 161.2 to 160.6.

New construction payments edge higher

MBA’s Builders Purchase Application Payment Index — which focuses on newly built single-family homes using data from the association’s Builder Application Survey — moved in the opposite direction in June. The median payment on applications tied to new construction rose to $2,199, up from $2,173 in May.

Both PAPI measurements rely on principal and interest payment data deflated by usual weekly earnings from the U.S. Bureau of Labor Statistics’ Current Population Survey. MBA also maintains a mortgage payment-to-rent ratio using median asking rent data from the U.S. Census Bureau’s Housing Vacancies and Homeownership survey.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.