US Mortgage Application Payment Index Falls in February

On Thursday, the Mortgage Bankers Association (MBA) reported that homebuyer affordability improved in February, with the national median payment applied for by purchase applicants decreasing to $2,061 from $2,070 in January, according to its Purchase Applications Payment Index (PAPI).

The PAPI measures how new monthly mortgage payments vary over time relative to income, using data from MBA’s Weekly Applications Survey. An increase in the index signals worsening borrower affordability as the mortgage payment-to-income ratio (PIR) rises, while a decrease indicates improving affordability conditions.

The national PAPI fell 0.4% to a reading of 150.0 in February, compared with 150.6 in January. Year-over-year, median earnings rose 3.7%, while payments fell 6.5%. As a result, the PAPI was down 9.9% from a year earlier (improved affordability).

For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment was $1,436 in February, compared with $1,445 in January.

Commenting on the report, MBA Associate Vice President of Housing Economics and Executive Director of the Research Institute for Housing America Edward Seiler said,

“Homebuyer affordability saw a modest improvement in February, as slightly lower mortgage rates helped ease monthly payment burdens despite a small uptick in loan sizes. The February PAPI declined over the month and is nearly 10% lower than a year ago, reflecting both reduced payments and steady income growth. While affordability conditions remain challenging in many markets, these incremental gains—felt across more than half of states—are an encouraging sign for prospective buyers, particularly those seeking lower-payment options.”