The share of mortgages financed through conventional, FHA, and VA loans, as well as cash, remained steady in the second quarter while the number of new homes sold grew by 22%, according to National Association of Home Builders’ analysis of the Census Bureau’s Quarterly Sales by Price and Financing report.
New home sales due to FHA-backed loans increased to a quarterly count of 28,000 as its market share remained at 17% for the second quarter.
It is worth adopting some caution associated with the Census market share estimates. In particular, the statistical error associated with the FHA, cash, and VA sales estimates from this data set are relatively high. This reduces the reliability of measures of short-term market changes.
Mindful of this limitation, over the long run the current FHA-share is lower than the 28% share determined for the first quarter of 2010 but still substantially higher than the 10% 2002-2003 average.
As the housing market has stabilized, conventional financing has expanded. The market share of new home sales with conventional financing was 58% in 2009 and came in at approximately 69% for the second quarter of 2016. This share has remained between 69% and 73% every quarter over the last three years.