FHA fee cut attracts more first-time buyers

WASHINGTON – July 29, 2015 – The Federal Housing Administration’s (FHA) reduction in mortgage insurance premiums on FHA loans appears to be having an impact on homeownership.

The cuts – which average $900 per year – may be prompting first-time and millennial buyers to enter the housing market: FHA loans were used in 23 percent of financed home purchases in the second quarter compared to 19 percent during the same period one year earlier, according to RealtyTrac.

“So far, the FHA premium reduction is having a bigger impact on getting millennial first-time buyers and other low down-payment borrowers, such as former homeowners returning to the housing market, off the fence [compared to other federal programs],” says RealtyTrac Vice President Daren Blomquist.

Source: MarketWatch (07/25/15) Goldstein, Daniel

© Copyright 2015 INFORMATION, INC. Bethesda, MD

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