“Homebuyer affordability improved in February, as mortgage rates helped reduce monthly payment burdens despite a slight increase in loan sizes. February’s PAPI fell on the month and was nearly 10% lower than last year, reflecting both reduced payments and continued income growth,” said Edward Seiler, MBA vice president and senior director of Economics. Research Institute for Housing Americasaid the statement.
“While affordability conditions remain difficult in many markets, these growing gains – felt in more than half of the states – are an encouraging sign for prospective buyers, especially those looking for lower down payment options.”
Seiler warned that geopolitical risk could reverse some of the recent gains. “Unfortunately, this month’s unrest in the Middle East has put pressure on mortgage rates, which may impact purchases throughout the coming months,” he said.
The national PAPI fell 0.4% to read 150.0 in February, down from 150.6 in January. On an annual basis, payments fell by 6.5% as household income rose by 3.7%, making the index 9.9% lower than last year and reflecting an improvement in affordability.
For borrowers applying for low-payment loans, defined as 25 percent down payments, the average payment fell to $1,436 in February, down from $1,445 in January.
On the new construction side, the MBA’s Builders’ Purchase Application Payment Index (BPAPI), which focuses on loans for newly constructed single-family homes, showed a slight decrease in payments. The median mortgage payment in that category fell to $2,157 in February, down from $2,161 in January.
Accessibility by product type and borrower group
While overall payments remain historically high compared to pre-pandemic levels, February data showed mixed results for all loan products. The national average mortgage payment was $2,061 in February 2026, down $9 from January and $144 below the February 2025 level – an annual decrease of 6.5%.
Because Federal Housing Administration (FHA) loan applicants, the national average payment fell to $1,763, down from $1,782 in January and from $1,907 in February 2025. For regular loan applicants, the average payment reached $2,089, compared to $2,081 in January, but remained below the figure of $2,226 in February.
Affordability has also improved across major racial and ethnic borrower groups. The national PAPI for Black households fell from 155.7 in January to 155.0 in February. Hispanic households fell from 142.8 to 142.2, while whites fell from 152.3 to 151.7.
The spread of state-level accessibility remains wide
Accessibility conditions continued to vary widely 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 mortgage payments vary over time relative to income by combining MBA Weekly Application Survey data with income data from US Bureau of Labor Statistics‘ Current Population Survey. Average weekly wages reflect full-time wages and salary before taxes and deductions, and include overtime, commissions and tips. The data is not seasonally adjusted.
The BPAPI is constructed similarly but uses data from the MBA’s Builder Application Survey and focuses specifically on newly constructed single-family homes. In both indexes, principal payments and interest are reduced by a series of similar benefits, and higher index values indicate a higher ratio of payment and interest than months with lower readings.
