In August, homebuyer affordability improved as the national median mortgage payment dropped to $2,057 from $2,140 in July, according to the recently released Purchase Applications Payment Index from the Mortgage Bankers Association. The index, which tracks changes in mortgage payments relative to income, fell by 3.9% from July.
While payments dropped by 5.2%, moderate earnings growth of 3.2% over the past year led to an 8.2% annual decline in the index. For those applying for lower-payment mortgages, the national payment decreased to $1,388 from $1,444.
“Homebuyer affordability conditions improved for the fourth consecutive month, with lower mortgage rates, rising incomes, and slower home-price growth giving prospective buyers’ budgets a much-needed boost,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. “MBA expects that lower mortgage rates, coupled with increasing housing inventory, will entice additional homebuyers to enter the housing market.”
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