"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."
The MBA's Payment-to-Income Affordability Index (PAPI) fell 0.2% to 149.6, marking a sixth consecutive monthly improvement. Affordability has improved for six straight months as lower mortgage rates and strong household earnings growth have increased prospective buyers' purchasing power. The MBA expects affordability to continue improving in 2026, forecasting a 0.3% national decline in house prices and mortgage rates near 6.4% for the year. An increase in PAPI signals worsening borrower affordability through higher payment-to-income ratios; a decrease indicates improving affordability. The national median payment for lower-payment borrowers rose to $1,409 in November. The mortgage-payment-to-rent ratio fell to 1.35 as median asking rent reached $1,534.
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