The latest data from the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI) reveals that the median monthly payment for a new mortgage in April rose 8.8% to $1,889, up from March when it was $1,736.
The national PAPI increased 7.8% to a reading of 162.7 in April, up from March’s reading of 150.9, meaning payments on new mortgages take up a larger share of a typical person’s income. Compared to April 2021 (120.2), the index jumped 27.0%. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased 9.6% to $1,236 from $1,129 in March.
In remarks prepared to accompany the April PAPI, Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director of the Research Institute for Housing America, said:
“Rapid home-price growth, low inventory, and an 80-basis-point surge in mortgage rates slowed purchase applications in April, with the typical borrower’s principal and interest payment increasing $153 from March and $569 from a year ago. Despite strong employment and wage growth, housing affordability has worsened since the start of the year. Mortgage payments are taking up a larger share of homebuyers’ incomes, and sky-high inflation is making it more difficult for some would-be buyers to save for a down payment or come up with the additional cash they need to afford a higher monthly payment.
MBA’s updated forecast calls for mortgage rates to remain above 5% for most of 2022, but prospective homebuyers should start to see moderation from the double-digit price appreciation reported for well over a year in most of the country.”
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Mortgage Application Payments Jumped 8.8 Percent to $1,889 in April