"Housing affordability conditions improved for the seventh consecutive month to close out 2025 because of lower mortgage rates and steady household earnings growth, said Edward Seiler, MBA's associate vice president of housing economics and executive director of the Research Institute for Housing America. 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."
"MBA's national PAPI declined 0.5% in December to a reading of 148.8, down from 149.5 in November, a signal of improved affordability. While mortgage payments fell 4.8% from a year earlier, earnings growth of 2.9% contributed to a 7.5% annual improvement in affordability, the association said. For borrowers at the lower end of the payment spectrum, the national mortgage payment at the 25th percentile increased slightly to $1,413 in December, up from $1,409 in November. The Builders' Purchase Application Payment Index, which focuses on newly built single-family homes, showed the median mortgage payment rose to $2,173 in December, up from $2,157 in November."
Housing affordability improved for the seventh consecutive month in December 2025, driven by lower mortgage rates and steady household earnings growth. The Mortgage Bankers Association's national PAPI declined 0.5% to 148.8 in December from 149.5 in November, signaling improved affordability. Mortgage payments fell 4.8% year-over-year while earnings rose 2.9%, producing a 7.5% annual improvement in affordability. Median payments varied by cohort: the 25th percentile national mortgage payment rose slightly to $1,413, builders' median rose to $2,173, FHA applicants' payments increased to $1,802 but remained below year-ago levels, and conventional applicants' median declined to $2,036. Affordability improved across racial and ethnic groups, and Nevada recorded the highest state PAPI at 235.8.
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