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“Higher mortgage rates and home prices led to continued erosion in homebuyer affordability in February,” said Edward Seiler, MBA’s associate vice president of housing economics. “Many prospective homebuyers continue to feel this affordability squeeze, with the typical purchase application loan amount increasing $8,003 over the month to $320,003.”
Other key findings were:
- The national median mortgage payment was $2,061 in February, up from $1,964 in January and from $1,920 in December. It is up $408 from one year ago, equal to a 24.7% increase.
- The national median mortgage payment for FHA loan applicants was $1,707 in February, up from $1,619 in January and from $1,201 in February 2022.
- The national median mortgage payment for conventional loan applicants was $2,117, up from $2,009 in January and from $1,750 in February 2022.
- The top five states with the highest PAPI were: Nevada (251.6), Idaho (249.3), Arizona (225.7), Utah (222.8), and California (217.4).
- The top five states with the lowest PAPI were: Connecticut (111.7), North Dakota (118.2), West Virginia (119.8), Louisiana (121.1), and Vermont (121.6).
- Homebuyer affordability decreased for Black households, with the national PAPI increasing from 161.7 in January to 169.7 in February.
- Homebuyer affordability decreased for Hispanic households, with the national PAPI increasing from 154.6 in January to 162.2 in February.
- Homebuyer affordability decreased for White households, with the national PAPI increasing from 162.9 in January to 170.9 in February.
“Given ongoing economic uncertainty and the likelihood of a recession, MBA expects mortgage rates to decline as this year progresses, which will help affordability,” Seiler said.
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