Mortgage Application Payments Remain Flat in February
March 27, 2025
WASHINGTON, D.C. (March 27, 2025) – Homebuyer affordability remained flat in February with the national median payment applied for by purchase applicants remaining unchanged at $2,205 in February. This is according to the Mortgage Bankers Association's (MBA) 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 conditions remained unchanged in February as many homebuyers continue to weigh their options on entering the housing market amid economic uncertainty and slowly declining mortgage rates,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. “While February’s data reflects little movement, we do expect that rising housing inventory, coupled with lower mortgage rates, will spur additional activity in the housing market.”
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 (Figure 1) increased 0.1 percent to 166.2 in February from 166.1 in January. Median earnings were up 5.0 percent compared to one year ago, and while payments increased 1.0 percent, the significant earnings growth means that the PAPI is down 3.8 percent on an annual basis. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased to $1,506 in February from $1,519 in January.
The Builders’ Purchase Application Payment Index (BPAPI) showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey decreased to $2,463 in February from $2,531 in January.
Additional Key Findings of MBA's Purchase Applications Payment Index (PAPI) – February 2025
- The national median mortgage payment was $2,205 in February 2025—unchanged from January. It is up by $21 from one year ago, equal to a 1.0% increase.
- The national median mortgage payment for FHA loan applicants was $1,907 in February, down from $1,934 in January and up from $1,872 in February 2024.
- The national median mortgage payment for conventional loan applicants was $2,226, up from $2,225 in January and up from $2,194 in February 2024.
- The top five states with the highest PAPI were: Idaho (252.5), Nevada (241.8), Rhode Island (224.7), Arizona (222.9), and Tennessee (209.4).
- The top five states with the lowest PAPI were: Louisiana (121.9), Connecticut (125.0), North Dakota (126.1), New York (131.3), and Oklahoma (132.1).
- Homebuyer affordability marginally decreased for Black households, with the national PAPI increasing from 157.3 in January to 157.4 in February.
- Homebuyer affordability remained constant for Hispanic households, with the national PAPI remaining unchanged from January to February at 158.8.
- Homebuyer affordability remained constant for White households, with the national PAPI remaining unchanged from January to February at 169.3.
About MBA’s Purchase Applications Payment Index
The Mortgage Bankers Association’s Purchase Applications Payment Index (PAPI) measures how new mortgage payments vary across time relative to income. Higher index values indicate that the mortgage payment to income ratio (PIR) is higher than in a month where the index is lower. Contrary to other affordability indexes that make multiple assumptions about mortgage underwriting criteria to estimate mortgage payment level, PAPI directly uses MBA’s Weekly Applications Survey (WAS) data to calculate mortgage payments.
PAPI uses usual weekly earnings data from the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS). Usual weekly earnings represent full-time wage and salary earnings before taxes and other deductions and include any overtime pay, commissions, or tips usually received. Note that data are not seasonally adjusted.
MBA’s Builders’ Purchase Application Payment Index (BPAPI) uses MBA’s Builder Application Survey (BAS) data to create an index that measures how new mortgage payments vary across time relative to income, with a focus exclusively on newly built single-family homes. As with PAPI, higher index values indicate that the mortgage payment to income ratio (PIR) is higher than in a month where the index is lower. To create BPAPI, principal and interest payment amounts are deflated by the same earnings series as in PAPI.
The rent data series calculated for MBA’s national mortgage payment to rent ratio (MPRR) comes from the U.S. Census Bureau’s Housing Vacancies and Homeownership (HVS) survey’s median asking rent. The HVS data is quarterly, and as such, the mortgage payment to rent ratio will be updated quarterly. The HVS data is quarterly, and as such, the mortgage payment to rent ratio will be updated quarterly. MPRR data is not included in the February 2025 data.
For additional information on MBA’s Purchase Applications Payment Index, click here.