Mortgage payments rise 2.2% in May as rates, loan sizes grow

Homebuyer affordability deteriorated in May as higher mortgage rates and larger loan application amounts pushed monthly mortgage payments higher, according to data released Thursday by the Mortgage Bankers Association (MBA).

The MBA’s Purchase Applications Payment Index (PAPI), which measures mortgage payment burdens relative to income, rose 2.2% to a reading of 159.4 in May. — up from 156.0 in April. An increase in the index indicates worsening affordability conditions for prospective borrowers.

The national median mortgage payment applied for by purchase applicants climbed to $2,198 in May, up from $2,152 in April. Despite the monthly increase, the median payment was down 0.6% from a year earlier.

“Affordability conditions weakened in May, as rising mortgage rates, combined with increasing loan application amounts, drove mortgage payments higher,” said Edward Seiler, the MBA’s associate vice president of housing economics and executive director of the Research Institute for Housing America.

“The decrease in affordability was widespread, with conditions declining in 33 states,” Seiler added. “While affordability conditions remain improved compared to a year ago, the monthly increase underscores how sensitive prospective homebuyers remain to changes in interest rates and home prices.”

The index compares mortgage payments with household earnings, using mortgage application data from the MBA’s weekly applications survey and earnings data from the U.S. Bureau of Labor Statistics. Higher index values indicate a larger share of income is needed to cover mortgage payments.

For borrowers applying for lower-payment mortgages, represented by the 25th percentile of applicants, the median payment increased to $1,532 in May, up from $1,493 in April.

Affordability trends varied across loan types. The median payment for applicants seeking Federal Housing Administration (FHA) loans rose to $1,873 in May, up from $1,829 the previous month, although it was below the $1,927 figure recorded a year earlier. Conventional loan applicants saw median payments increase to $2,211, up from $2,166 in April, while remaining slightly below the $2,235 level seen in May 2025.

The MBA said affordability declined across major demographic groups. The index for Black households increased to 165.0 from 161.5 in April, while the index for Hispanic households rose to 147.5 from 144.3. The index for White households increased to 160.7 from 157.3.

Among states, Idaho recorded the highest affordability burden with a PAPI reading of 254.1, followed by Nevada at 231.5, Rhode Island at 213.1, Arizona at 209.1 and Florida at 200.4.

Louisiana posted the lowest index reading at 121.7, followed by the District of Columbia at 123.1, Connecticut at 124.9, Alaska at 128.6 and Maryland at 132.2.

Meanwhile, affordability for newly built homes improved slightly. The MBA’s Builders’ Purchase Application Payment Index showed the median mortgage payment for purchase loans on newly constructed single-family homes fell to $2,173 in May, compared to $2,188 in April.

The monthly decline in builder-related payments contrasted with broader affordability trends in the existing home market, where rising rates and larger loan balances continued to pressure prospective buyers.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.