Home affordability levels reversed course in March, with new monthly mortgage payments heading higher in tandem with interest rates and purchase amounts.

The median payment on new purchase-loan applications during the month accelerated 3.4% to $2,131 from $2,061 in February, according to the Mortgage Bankers Association affordability index. The latest number came in 1.8% lower, though, from the median $2,173 of one year ago. 

"Homebuyer affordability conditions declined in March, as rising mortgage rates and higher loan amounts continued to stretch household budgets," said Edward Seiler, MBA's associate vice president of housing economics and executive director of the Research Institute for Housing America, in a press release. 

The March developments helped push MBA's purchase-applications payment index — which factors housing affordability based on a combination of interest rates, loan amounts and wages — upward to a reading of 154.9 as a result, compared to 149.8 a month earlier. Higher scores representing decreased affordability. 

Yet with a year-over-year drop in payment amounts and annual household earnings growth of 3.9%, affordability improved from March 2025 when the index registered a mark of 164.1.

Economic concerns from the onset of the Iran War in late February drove mortgage rates higher throughout the following month, while the median purchase application amount grew to approximately $335,000. Both trends reflect continued challenges present in today's housing market, which are hindering prospective homebuyers this year, Seiler continued. 

"Looking ahead, while these headwinds may temper demand in the near term, improvements in housing supply and moderating home-price growth could help restore some stability to the housing market," he said.

A separate report detailing April inventory data from Realtor.com suggests sellers may be providing housing markets with some of the support needed for such stability. New listings grew 8.7% nationwide, with notable gains in the Northeast and Midwest in April. The median home price also fell on a year-over-year basis, the online housing platform said. 

Monthly increases hit all types of borrowers

Still, while the future outlook may hold promise, monthly median payments in March increased across the board among loan and property types, MBA reported. Similarly, all racial demographic groups experienced a drop in buyer affordability levels.   

• The median for new Federal Housing Administration-backed purchase loans climbed 2.8% higher to $1,812 from $1,763 in February. Compared to March 2025, the number fell 3.2% from $1,872.
• The amount reported on conventional loan applications came in at $2,145 in March compared to $2,089 the prior month, an increase of 2.7%. Year over year, the median pulled back 2.5% from $2,200. 
• New-home purchase-loan amounts, likewise, jumped 2.5% to $2,210 from $2,157 in February. The median payment on new single-family constructions declined 3.4% from a year earlier, when it clocked in at $2,288.    

Respective components of MBA's index showed affordability declining by a near-similar 3.4% margins for white, Black and Hispanic buyers in March. Residents in the Western U.S. saw the most challenging affordability levels, with Idaho and Nevada posting the highest payments index scores of 240.2 and 228.4. Rounding out the top five were Rhode Island, Arizona and Florida.

On the other end, new homebuyers least encumbered by their purchases were found in Louisiana, which reported a metric of 118 in the MBA report. The District of Columbia followed at 118.4, with Connecticut, New York and Alaska next in terms of overall state affordability.