By David Logan | Eye On Housing
NAHB analysis of the most recent Quarterly Sales by Price and Financing published by the Census Bureau reveals that 70.8% of new home sales in 2016 were financed with conventional products—up from the most recent trough of 58.5% in 2010. Conversely, over the same period, the share of new home sales financed with FHA mortgages has fallen from 25.1% to 15.7%. FHA loan market share tends to decrease as economic conditions improve and lending conditions ease, as a larger share of buyers qualify for conventional loans.
Census data and NAHB calculations show that new home sales backed by FHA products fell to 18,000 (-2,000) in the fourth quarter of 2016, though market share held steady at 14%. Market share fell to 15% in the second quarter of 2013 after reaching a high of 28% in the first quarter of 2010, and has averaged 14.4% ever since.
