The typical mortgage payment on a new home dipped a bit in July, but was still higher than a year ago.
The national median mortgage payment applied for by new homebuyers was down to $2,175 in July, a $16 decline from June, according to the latest data from the Mortgage Bankers Association. That’s $48 more than the median payment in July 2025, a 2.2% increase.
“Homebuyer affordability improved in July, as a decline in the median loan amount offset a modest increase in mortgage rates,” Edward Seiler, the association’s Associate Vice President of Housing Economics, said in a post.
Seiler, also executive director of Research Institute for Housing America, said housing affordability has “improved on an annual basis, as earnings growth continued to outpace the increase in mortgage payments.”
Mortgage rate increases are affecting affordability, but he pointed out that “any sustained reversal, combined with moderating home-price growth and rising inventory, would provide additional relief for prospective buyers through the remainder of 2026.”
That’s not the direction mortgage rates appear to be headed. New Federal Reserve Chairman Kevin Warsh warned last Friday that an interest rate hike is possible in the coming months, citing inflation data that “do not tell me that underlying trends have meaningfully improved.”
As of last Thursday, a 30-year fixed-rate mortgage averaged 6.66%, up 0.01 percentage points from the prior week, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac. In July, the weekly average had been as low as 6.43%.
Mortgage rates tracked daily are already shooting up, jumping from 6.75% on Thursday, the day before the Fed chairman addressed an annual economic symposium in Jackson Hole, Wyoming, to 6.87% by midday Monday, according to Mortgage News Daily.
At the start of the year, mortgage rates had finally fallen below 6% for the first time since 2022, but began climbing after the U.S. and Israel launched the ongoing war against Iran in late February that has also driven up other consumer costs, especially gas.
What the Mortgage Bankers Association calls the “Purchase Applications Payment Index” measures affordability by comparing new homebuyer principal and interest payments to income. A higher payment index translates to less affordability.
Nationally, even though the median mortgage payment was 2.2% higher than a year earlier, growth in earnings went up more, 3.6%, meaning the index showed a slight improvement in affordability.
The five states with the least affordability as shown by the index were Idaho, Nevada, Rhode Island, Arizona and Florida. The five states deemed the most affordable by the calculation were Louisiana; Washington, D.C.; North Dakota; Alaska and Connecticut.
Redfin, an online real estate brokerage, recently reported a higher seasonally adjusted median monthly mortgage payment in the U.S. for the four weeks ending Aug. 23, $2,600, based on a 6.65% mortgage rate. That number is up 0.06 percentage points from the previous year.