December marked the seventh consecutive month of improvement in housing affordability, according to the Mortgage Bankers Association’s (MBA) Purchase Applications Payment Index (PAPI). The national median payment for purchase applicants during the last month of 2025 was $2,025, down from $2,034 in November.
PAPI measures variances in new monthly mortgage payments across time relative to income, utilizing data from MBA’s Weekly Applications Survey , according to an MBA press release.
MBA’s Associate Vice President of Housing Economics and Edward Seiler attributed the reduction to lower mortgage rates and steady household earnings growth.
“MBA expects that moderating home-price appreciation, combined with even lower mortgage rates, will continue to gradually ease affordability constraints and support increased housing market activity,” said Seiler, who is also the executive director of the Research Institute for Housing America.
An increase in MBA’s PAPI is indicative of declining borrower affordability conditions and a higher mortgage payment to income ratio , caused by increasing application loan amounts, rising mortgage rates or a decrease in earnings. When the PAPI declines, it is indicative of improving borrower affordability conditions during which loan application amounts decrease, mortgage rates decrease or earnings increase.
The national PAPI dropped 0.5 percent to 148.8 in December from 149.5 in November. While payments decreased 4.8 percent, earnings growth of 2.9 percent means that the PAPI is down (affordability is higher) 7.5 percent on an annual basis. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment increased to $1,413 in December from $1,409 in November.
The Builders’ Purchase Application Payment Index showed that the median mortgage payment for purchase mortgages from MBA’s Builder Application Survey ticked up to $2,173 in December from $2,157 in November.