The most recent U.S. Census Bureau’s Quarterly Sales by Price and Financing with analysis provided by the National Association of Home Builders (NAHB) reveals that conventional loans financed the largest share of new home sales since 2018. The share of sales backed by conventional loans in the Q1 2021 increased 2.8 percentage points (quarter-over-quarter) to 71.6% and 2.1 percentage points since Q1 2020. FHA-backed sales made up 19.3% of new home sales in Q1 of 2021, a 1.0 percentage point increase, quarter-over-quarter and 1.6 percentage points higher than Q1 2020. The four-quarter moving average (MA) of the share of new home sales financed through FHA has climbed every quarter over the past two and a half years, from 12.2% to 18.9%. The four-quarter MA of sales financed with conventional loans has declined 4.4 percentage points over the same period. In contrast, the share of VA-backed sales and cash purchases fell 2.1 and 0.9 percentage points, respectively, in Q1 2021. The reported number of cash sales has held steady over the past three quarters while losing share due to the increase in total new home sales. Cash purchases increased 2,000 on a year-over-year basis.
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Conventional and FHA Mortgages Finance 90% of New Home Sales in Q1 2021