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By Omar Mohammed
Reporter, Economy & Finance
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Mortgage payments in Florida are some of the highest in the nation in relation to how much people earn, according to the Mortgage Bankers Association (MBA), an indication that homebuyers in the state are facing less affordable prospects in acquiring property.
The MBA measured mortgage payments plus interest on loans in relation to income to understand how affordable purchasing a home is in different parts of the country. When it jumps, the measurement, known as the Purchase Applications Payment Index (PAPI), illustrates that buying a home is relatively less affordable.
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In April, Florida was one of the five states—plus the District of Columbia—with the highest PAPI scores, at 228, suggesting a mortgage outlay that was expensive in relation to how much residents earn.
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Other states with high PAPI scores were Idaho, which led the way at 267, followed by Nevada at 265, Arizona at 236, Florida and Rhode Island at 225. States with the lowest scores were Alaska (132), Louisiana (134.1), Connecticut (134.2), New York (139), and Washington, D.C. (141).
The scoring comes at a time when affording a home is a challenge for most buyers as prices are at record high across the country while mortgage rates are expensive, hovering above 7 percent over the last few weeks.
Read more: How Much House Can You Afford?
The median mortgage payment increased to about $2,600 in April, a jump of nearly 7 percent compared to the same time a year ago, which amounts to $144 more in monthly payments, according to MBA.
In Florida, the first quarter saw prices for homes go up. The median sale price for a single-family existing home was $415,000, up nearly 4 percent on a yearly basis. Condos and townhouses went for $325,500, also a jump of close to 3 percent, according to Florida Realtors.
"Persistently high mortgage interest rates hovering well above 6 [percent] continue to challenge buyers in Florida, especially first-time buyers," Florida Realtors President Gia Arvin, said last month. "While we are seeing an increase in new listings and in for-sale inventory, home sellers thinking of moving—whether it's downsizing or needing a larger home—are also impacted by the higher rates when considering their next home purchase."
Read more: How to Buy a House With Bad Credit
The reality of high mortgage rates is making it tougher for Americans to afford a home, with MBA's April data adding to the chorus of how difficult the housing market is, especially for first-time home purchasers.
"Homebuyer affordability conditions declined further as mortgage rates remained above 7 percent in April, sidelining many prospective buyers from entering the housing market," Edward Seiler, MBA's associate vice president, housing economics, and execuive director, Research Institute for Housing America, said in a statement.
"In addition to lower mortgage rates, more housing inventory is desperately needed in markets throughout the country this summer to alleviate these tough affordability conditions."
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