Monthly mortgage payments have hit a new record high. The national median monthly payment reached $2,012 in October. That’s an increase of 3.7% from September’s $1,941, according to the Mortgage Bankers Association (MBA).
Skyrocketing rates, record-high prices and inflation have weighed on potential homebuyers. Buyers’ budgets are already strained. With mortgage payments still rising, their outlook remains gloomy.
“Higher mortgage rates are also squeezing the purchasing power of prospective buyers. The median loan amount last month decreased to $295,000 – the lowest level since January 2021,” said Edward Seiler, MBA’s associate vice president of housing economics and executive director, research institute for Housing America. “Weakening affordability and increased economic uncertainty are expected to slow homebuying activity in the final two months of the year.”
The MBA’s Purchase Applications Payment Index (PAPI) measures affordability conditions. According to the index, affordability has declined — October’s national reading increased to 167.9, up from 163.6 in September.
The index surpassed the previous high of 164.2 set in May 2022 and is 38.1% higher than a year ago.