Borrowers Are Relying Less on FHA-Backed Loans

July 28, 2017

FHA-backed loans accounted for only 11.9 percent of new home sales last quarter, the lowest level since 2014 and a drop of five percentage points from last year.

NAHB analyzed the recent Quarterly Sales by Price and Financing report from the Census Bureau and found how buyers are financing their new homes. A majority, 72.6 percent, have conventional mortgages, 8.9 percent use VA products, and 6.5 percent purchase with cash.

Before the housing bubble burst last decade, conventional mortgages were the norm, accounting for nearly 90 percent of all sales in 2006 and 2007. After the bubble, conventional mortgages dropped down to a little more than half. FHA loans reached their peak of a 28 percent share in 2010.

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