Mortgage Payments Grow in April, Marking Fourth Consecutive Increase and New Record High

The Mortgage Bankers Association (MBA) reported on Thursday (5-25-23) that its Purchase Applications Payment Index (PAPI)—which measures how new monthly mortgage payments vary across time, relative to income, using data from MBA’s Weekly Applications Survey—shows homebuyer affordability declined further in April. The national median payment applied for by applicants increased 0.9% to $2,112 from $2,093 in March.

An increase in MBA’s PAPI—indicative of declining borrower affordability conditions—means that the mortgage payment to income ratio (PIR) is higher due to increasing application loan amounts, rising mortgage rates, or a decrease in earnings. A decrease in the PAPI—indicative of improving borrower affordability conditions—occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.

The national PAPI rose 0.5% to a reading of 172.3 in April, up from March’s reading of 171.5 and February’s reading of 168.9. The MBA notes that with the April increase, the PAPI hit another new record high. Compared to the April 2022 reading of 163.6, the index is up 5.3%.

For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased in April to $1,430 from $1,411 in March and $1,391 in February.