Surging interest rates pushed housing affordability lower for the second straight month in April, but rising wages helped blunt the blow for mortgage borrowers, according to the Mortgage Bankers Association.
The median monthly payment on April's purchase mortgage applications increased to $2,152
"Housing affordability conditions weakened slightly in April, as mortgage rates edged higher and rising loan amounts pushed monthly payments up from March," said Edward Seiler, MBA's associate vice president of housing economics, in a press release.
The new-home market managed to buck the month-to-month trend, though, with the median amount falling 1% to $2,188 from $2,210 in March, as some builders also reported they are
Wage growth turns into a bright spot
The 30-year conforming rate ended last month 25 basis points above where it sat at the end of February, according to
"Looking ahead, continued income gains and some stabilization in mortgage rates could help support better affordability conditions," he said.
The pace of wage growth exceeded interest rate acceleration to result in just a 0.3% overall bump up in MBA's purchase applications payment index, which ended April at a reading of 156. March's score clocked in at 155.5, with a higher value indicating falling affordability.
Annual income gains of 5.3% over the past 12 months played a large role in bringing the PAPI down from the 164.1 mark a year ago. While recent rate trends may come as bad news to aspiring homebuyers this spring, current payment levels show affordability is still up on a year-over-year basis across the market, MBA advised.
- Median payments for borrowers of Federal Housing Administration-backed mortgages increased to $1,829 in April, up from $1,812 in March. Year-over-year, the median level decreased from $1,895 in April 2025.
- Conventional loan applicants saw the median payment rise to $2,166 from $2,145 in March. In April 2025, the amount was $2,206.
Affordability across all demographic groups decreased month to month, with white households seeing the PAPI index score rising to 157.3 in April, compared to 156.8 in March.
Among Black mortgage applicants, the score increased to 161.5 from 161 in March, while Hispanic borrowers reported a PAPI index reading of 144.3, up from the previous score of 143.9.
Home affordability appeared most strained in two Western states, with Idaho reporting the highest PAPI reading last month, followed by Nevada. Rounding out the top five were Rhode Island, Arizona and Tennessee.
On the other end, the most affordable areas in the U.S. were Louisiana, Hawaii and the District of Columbia, MBA said.
