First-Time Buyers: Why Affordability Is Finally Easing
After years of affordability headwinds, new data suggests the tide may be turning for buyers — especially those entering the market for the first time. The 🔗Mortgage Bankers Association’s Purchase Applications Payment Index (PAPI) shows the national median mortgage payment fell to $2,100 in August, down $27 from July. It’s the fourth straight month of improvement, thanks to moderating mortgage rates and rising incomes. Edward Seiler, MBA’s housing economist, noted that this momentum could “boost prospective buyers’ purchasing power” as affordability constraints continue to ease.
Arizona remains one of the more expensive states by affordability index, but even here, the market is softening at the edges. With Phoenix homes taking 65–70 days to sell on average and fewer properties closing above list, first-time buyers have a rare opportunity: more time to make decisions, less competition from investors, and a boost in purchasing power from national affordability gains. Combined, these trends could help unlock the door for those trying to buy their first home.
📊 Key Affordability Findings from MBA (August 2025)
National Median Payment: $2,100 — down from $2,127 in July.
Conventional Loans: $2,112 median payment (down from $2,160 in July).
FHA Loans: $1,863 median payment — a lifeline for first-time buyers.
Earnings Growth: Up 3.2% YoY, giving buyers more income to work with.
PAPI Index: Down to 157.5, indicating improved affordability.
Arizona’s PAPI: Ranked 3rd highest in the nation at 214.0, underscoring local challenges even as conditions improve nationally.
🏜️ Arizona Snapshot for First-Timers
Days on Market: Phoenix homes are sitting ~65–70 days — double the national 31-day average
Above-List Sales: Only 13–14% of Arizona homes sold above list recently, compared to 20% nationally【redfin.com】【noradarealestate.com】.
Investor Competition: Institutional investors pulled back, reducing their share of Arizona purchases to 6.9% in early 2025【axios.com】.
Forecast: Phoenix remains a top 10 market for 2025, backed by affordability improvements and steady migration【nar.realtor】.
🐼 Mama Bear’s Take for First-Time Buyers
For first-time buyers, these conditions are a game-changer. Slightly lower payments, rising incomes, and more patient sellers add up to a market that’s finally tilting your way. FHA loan affordability in particular is improving, giving first-time homeowners a realistic path to ownership.
The key? Be ready. Pre-approval, strong budgeting, and knowing your loan options will help you jump on opportunities before conditions tighten again. The window may not stay open long — but for now, it’s a welcome shift for new buyers.
👉 Reach out to explore first-time buyer programs and lock in the right strategy.
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