Mortgage Payments Rise Modestly Month-Over-Month in May 2022

The Mortgage Bankers Association (MBA) reported on Thursday (6-23-22) 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), homebuyer affordability was mostly unchanged in May. The national median payment applied for by applicants was up slightly to $1,897 from $1,889 in April.

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 increased 0.4% to a reading of 163.4 in May, up from 162.8 in April, meaning payments on new mortgages take up a larger share of a typical person’s income. Compared to May 2021 (120.6), the index jumped 35.5%. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased 0.36% to $1,241 from $1,236 in April.

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Mortgage Application Payments Rise to $1,897 in May