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December 11, 2016

More Buyers Take Advantage of FHA Loans

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More Buyers Take Advantage of FHA Loans

Sales to buyers using Federal Housing Administration loans rose to a two-year high in the second quarter, according to RealtyTrac's June and Midyear 2015 U.S. Home Sales Report.

Buyers using FHA loans — which are typically low down payment loans that are used by first time home buyers -- made up 23 percent of all single family home and condo sales with financing in the second quarter of 2015. That's up from 19 percent in the second quarter of 2014 and the highest share since the first quarter of 2013.

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"As the investor-driven housing recovery faded in the first half of 2015, first-time home buyers, boomerang buyers and other traditional owner-occupant buyers started to step into the gap and pick up the slack," says Daren Blomquist, vice president at RealtyTrac. "This is good news for sellers in many markets, providing them with strong demand from a larger pool of buyers, and U.S. sellers so far in 2015 are realizing the biggest gains in home price appreciation since 2007."

The following markets, with a population of 1 million or more, had the highest share of buyers using FHA loans in the first six months of 2015:

  • Riverside-San Bernardino-Ontario in inland Southern California: 35%
  • Las Vegas: 32%
  • Oklahoma City: 31%
  • Salt Lake City: 30%
  • Phoenix: 29%

On the other hand, these major markets had the lowest share of buyers using FHA loans in the first six months of 2015:

  • San Jose, Calif.: 7%
  • Hartford, Conn.: 10%
  • San Francisco: 12%
  • Boston: 12%
  • Milwaukee: 13%

Source: RealtyTrac