Mortgage Payments Increase in April 2023 – for Fifth Consecutive Month – Setting New Record High
Mortgage Application Payments Increased 2.5 Percent to $2,165 in May
The Mortgage Bankers Association (MBA) reported on Thursday (6-29-23), that according to 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 (WAS), that homebuyer affordability declined further in May 2023, as the national median payment applied for by applicants increased 2.5% to $2,165 in May up from $2,112 in April 2023.
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 2.5% to a reading of 176.7 in May, up from 172.4 in April. The MBA notes that with the May increase the PAPI hit another new record high. Compared to the May 2022 reading of 163.2 the index is up 7.6%.
For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased in May to $1,462 up from $1,430 in April, and $1,411 in March and $1,391 in February.
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