Median Monthly Mortgage Payments Fall for Third Straight Month

Median monthly mortgage payments for new home purchases dropped to $2,162 in August, marking the third consecutive monthly decline. According to the Mortgage Bankers Association, the decrease was primarily driven by a reduction in median purchase loan amounts, which mitigated the pressure of higher mortgage rates.

The association's Purchase Applications Payment Index, which tracks payments relative to income, fell 0.6% to 154.3. Affordability improved compared to the previous year because household earnings growth outpaced the rise in mortgage payments. However, the broader market remains strained, with 27 states seeing a decline in affordability.

Payment trends diverged by loan type, as Federal Housing Administration loan payments decreased to $1,856 while median payments for conventional mortgage applicants rose to $2,188. Geographically, the District of Columbia and Louisiana recorded the best relative affordability, whereas Idaho and Nevada faced the highest payment burdens.