Mortgage application payments in US decline 1.3% in July

By Ovunc Kutlu

ISTANBUL (AA) - Mortgage application payments decreased 1.3% to $2,140 in July, from $2,167 in June, the Mortgage Bankers Association (MBA) said Thursday.

The MBA said its Purchase Applications Payment Index (PAPI), which measures how new monthly mortgage payments vary across time relative to income, declined 1.9% to 167.7 in July from 170.9 in June.

A decrease in the PAPI, which is indicative of improving borrower affordability conditions, occurs when loan application amounts decline, mortgage rates decrease, or earnings increase, according to the MBA.

Americans' median earnings were up 2.9% compared to a year ago, while their payments decreased 1% annually, it noted.

"Homebuyer affordability conditions improved for the third consecutive month as rates below 7 percent and rising housing inventory continue to bode well for prospective homebuyers," said Edward Seiler, MBA’s associate vice president of Housing Economics, and executive director of Research Institute for Housing America.

"MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market," he added.