Homebuyer Affordability Improves In February As Median Mortgage Payment Ticks Down

Homebuyer affordability improved modestly in February as the national median payment applied for by purchase applicants fell to $2,061, down from $2,070 in January, according to the Mortgage Bankers Association (MBA)’s Purchase Applications Payment Index (PAPI).

PAPI tracks how new monthly mortgage payments change over time relative to income, using data from MBA’s weekly applications survey.

“Homebuyer affordability saw a modest improvement in February, as slightly lower mortgage rates helped ease monthly payment burdens despite a small uptick in loan sizes. The February PAPI declined over the month and is nearly 10% lower than a year ago, reflecting both reduced payments and steady income growth,” Edward Seiler, MBA’s associate vice president of housing economics and executive director of the Research Institute for Housing America, said in a statement.

“While affordability conditions remain challenging in many markets, these incremental gains — felt across more than half of states — are an encouraging sign for prospective buyers, particularly those seeking lower-payment options.”

Seiler cautioned that geopolitical risk could reverse some of the recent gains. “Unfortunately, this month’s turmoil in the Middle East has put upward pressure on mortgage rates, which in turn could impact overall affordability in the months ahead,” he said.

The national PAPI decreased 0.4% to a reading of 150.0 in February, down from 150.6 in January. On an annualized basis, payments were down 6.5% as household earnings rose 3.7%, pushing the index 9.9% lower than a year earlier and signaling an improvement in affordability.

For borrowers applying for lower-payment mortgages, defined as the 25th percentile of payments, the median payment declined to $1,436 in February, down from $1,445 in January.

On the new-construction side, MBA’s Builders’ Purchase Application Payment Index (BPAPI), which focuses on mortgages for newly built single-family homes, showed a small decline in payments as well. The median mortgage payment in that segment decreased to $2,157 in February, down from $2,161 in January.

Affordability by product type and borrower group

While overall payments remain historically high compared to pre-pandemic levels, February data showed mixed results across loan products. The national median mortgage payment was $2,061 in February 2026, down $9 from January and $144 below the level in February 2025 — a 6.5% annual decline.

For Federal Housing Administration (FHA) loan applicants, the national median payment dropped to $1,763, down from $1,782 in January and from $1,907 in February 2025. For conventional loan applicants, the median payment edged up to $2,089, compared to $2,081 in January, but remained below the $2,226 figure in February 2025.

Affordability also improved across major racial and ethnic borrower groups. The national PAPI for Black households decreased from 155.7 in January to 155.0 in February. Hispanic households saw a decrease from 142.8 to 142.2, and white households saw a decrease from 152.3 to 151.7.

State-level affordability spread remains wide

Affordability conditions continued to vary sharply by state. In February, the highest PAPI readings — indicating the lowest affordability — were in Idaho (235.4), Nevada (225.7) and Rhode Island (204.2).

The lowest PAPI readings were in the District of Columbia (109.5), Louisiana (109.9), and Connecticut (114.6).

PAPI measures how new mortgage payments vary over time relative to income by combining MBA’s Weekly Applications Survey data with earnings data from the U.S. Bureau of Labor Statistics’ Current Population Survey. Usual weekly earnings reflect full-time wage and salary income before taxes and other deductions, and they include overtime, commissions and tips. The data is not seasonally adjusted.

BPAPI is constructed the same way but uses MBA’s Builder Application Survey data and focuses exclusively on newly built single-family homes. In both indexes, principal and interest payments are deflated by the same earnings series, and higher index values indicate a higher payment-to-income ratio than in months with lower readings.