The softening housing market is starting to show up in slightly smaller mortgage payments.
Home buyers paid up to $45 less on mortgage applications in July compared to June, according to
The MBA's Purchase Applications Payment Index fell 3% in July from June, and 4.1% from the same time last year. A shrinking index represents improving affordability, while an increase reflects rising loan application amounts, rates or a decrease in earnings.
Consumer median earnings are also up 3.7% annually. That should help buyers going forward despite mortgage rates
"While [rates are] still elevated, continued income growth and softening home-price gains should boost prospective buyers' purchasing power in the months ahead," he said in a press release.
Nationwide home price appreciation has been miniscule in recent months and more major metros are reporting
Which borrowers secured lower, or higher mortgage payments this summer?
National median mortgage payments fell monthly in July in various categories, although some loans were more expensive compared to last summer:
- The national median of $2,127 was down $45 from June and down $13 from last year;
- The Federal Housing Administration median of $1,865 was down $16 from June but up $27 from last year;
- The conventional median of $2,160 was down $45 from June but up $20 from last year
- The
new home median of $2,233 was down $40 from June.
The MBA did not release a figure for the Builder PAPI for last July. Monthly payments on applications for the lower 25th percentile of mortgage amounts also fell $32 from June, to $1,468. White and Hispanic households also enjoyed more affordability in July, while the MBA's index fell monthly for Black households.
Affordability was most strained in Nevada, the state with the highest PAPI. The metric which factors the mortgage payment-to-income ratio incorporates weekly federal earnings data. Louisiana had the lowest PAPI, followed by the traditionally pricier metro Washington, D.C., and New York state.
