Home Affordability Just Got Better—Here’s What You Need to Know!

Mortgage payments recently hit their lowest point of the year, offering some relief to homebuyers and those looking to refinance, according to the Mortgage Bankers Association (MBA). The median payment on new mortgage applications dropped to $2,057. This was a 3.9% decrease from July and a 5.2% drop from the previous year.

The MBA uses a tool called the Purchase Applications Payment Index (PAPI) to measure home affordability. In August, the PAPI score was 160.7, down from 167.2 in July. A lower score means homes are more affordable.

This recent improvement in affordability is largely due to lower mortgage rates, rising wages, and slower growth in home prices. Over the past year, wages have gone up by 8.2%, which has helped homebuyers afford more.

According to Seiler, the combination of lower rates and more available homes may encourage more people to enter the housing market. However, some experts are cautious as higher home prices in recent years still make buying a house difficult.

Additionally, more houses are staying on the market for longer—48% of homes for sale in the U.S. had been listed for at least 60 days in August, the highest level since 2019.

With mortgage rates dropping and affordability improving, now could be a great time to take the next step in your homebuying or refinancing journey.

Whether you're looking for your first home or considering refinancing for better terms, connecting with a local mortgage advisor can help you explore your options and make the best financial decision. Reach out today to see how these changes in the market could work in your favor!