Mortgage Affordability Improves in June as Median Payment Drops

Homebuyer affordability experienced a marginal improvement in June as the national median payment for new purchase mortgage applications decreased to $2,191. This figure represents a slight decline from the $2,198 median payment recorded in May, according to data from the Mortgage Bankers Association (MBA). The MBA's Purchase Applications Payment Index (PAPA), which monitors changes in monthly mortgage payments relative to household income, indicated this trend. The national PAPA reading for June fell by 0.3% to 157.9, 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, explained that a reduction in the average loan amounts for new mortgage applications is counteracting increases in mortgage rates. This dynamic has led to the $7 decrease in the median monthly payment from May to June. Concurrently, household earnings have grown by 4.6% over the past year. This income growth has resulted in the PAPA index being 3.5% lower on an annual basis, signifying that mortgage payments are consuming a smaller proportion of income compared to the previous year, despite remaining at historically high levels. For borrowers seeking loans at the lower end of the market, specifically at the 25th percentile, the national median payment also decreased to $1,522 in June, down from $1,532 in May. The data also revealed variations in affordability based on loan type and geographic location. For Federal Housing Administration (FHA) borrowers, the national median mortgage payment saw a slight decrease to $1,872 in June, down from $1,873 in May and $1,881 in June of the preceding year. Conventional loan applicants experienced a minor reduction in their median payment, which ticked down by $2 from May to $2,209. However, this figure was slightly higher than the $2,205 median payment recorded for conventional loans in June 2025. Affordability challenges remain particularly acute in Western states. Idaho reported the highest PAPI reading at 251.2, followed by Nevada at 230.4, Arizona at 209.7, Rhode Island at 208.7, and Utah at 195.8. In contrast, states with the lowest PAPI readings, indicating more favorable payment-to-income ratios, included Louisiana at 119.6, Washington, D.C. at 122.0, Vermont at 126.7, New York at 128.1, and West Virginia at 129.3. These regional disparities highlight the uneven impact of mortgage payment burdens across the country.