Sources of financing for new home sales in 2015.

There is an ongoing long-run trend of buyers financing new homes with conventional mortgages, according to an analysis of the most recent census data by the National Association of Home Builders. NAHB economist Robert Dietz dives into the topic and dissects the varying method of financing. Dietz writes,

"The FHA share bumped up at the start of 2015 due to a reduction in FHA mortgage insurance premiums, reducing annual mortgage insurance premiums by 0.5 percentage points from 1.35 percent to 0.85 percent. Prior to this announcement and since 2010, the annual MIP on a typical FHA loan nearly tripled and the upfront MIP increased 75 basis points. Further, FHA had terminated the policy that allowed borrowers to stop paying mortgage insurance premiums after their loan reaches 78 percent of its original value.

Conventional financing has expanded as the housing recovery has grown. The market share of new home sales with conventional financing was 62% in 2011 and came in at approximately 71% for the fourth quarter of 2015."

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