"Many prospective homebuyers continue to feel this affordability squeeze".
Homebuyer affordability continued to suffer in February due to the uptick in mortgage rates and high prices, according to the Mortgage Bankers Association's latest Purchase Applications Payment Index (PAPI).
Nationwide, the index hit a new record high of 169.7 in February, up 4.9% month over month, indicating poorer borrower affordability conditions. The national median payment applied for by purchase applicants rose to $2,061 from $1,964 in January. The mortgage payment for borrowers applying for lower-payment loans grew to $1,391 from $1,322 the previous month.
Additionally, the median mortgage payment for purchase loans climbed to $2,492 last month, MBA's Builders' Purchase Application Payment Index revealed.
"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:
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