Mortgage applicants get slight reprieve from steep loan payments

“Homebuyer demand has faltered this summer, as lingering economic uncertainty, high inflation, and still-high mortgage rates caused many prospective buyers to delay their home search,” Seiler said. “The combination of a strong job market and moderating home-price growth could entice some of these buyers to return in the coming months.”

Read more: New home purchase applications stalled by economic uncertainty

The national PAPI dropped 3.8% last month to a reading of 157.7, meaning payments on new mortgages take up a smaller share of a typical person’s income. The index is 35.2% higher than last year’s 116.6 reading. For borrowers applying for lower-payment mortgages (the 25th percentile), the national mortgage payment decreased by $31 month over month to $1,210.

MBA’s national mortgage payment to rent ratio (MPRR) climbed from 1.38 in the first quarter to 1.44 in the second quarter, meaning mortgage payments for home purchases have increased relative to rents. The national median asking rent increased 4.7% quarter over quarter to $1,314, and the 25th percentile mortgage application payment to median asking rent ratio was 0.94 in June, up from 0.90 in March.

“Rent growth has remained incredibly strong in recent quarters, but the influx of new developments coming on to the market should alleviate some of the affordability pressures that are affecting renters in many parts of the country,” Seiler said.