By Any Measure FHA’s Role is Shrinking

The Federal Housing Administration (FHA) saw its share of
the mortgage market soar to 72 percent of all mortgages issued in 2008 as other
lenders pulled back and FHA moved into one of the two roles it was designed to
fill, as a counterforce providing access to credit when the private sector
pulls back
, typically because of economic stress. Since then that share has
steadily declined and FHA is back down to around 15-17 percent.

In a recent entry in the National Association of Realtor’s® Economist Commentaries, Ken
Fears, NAR’s Director of Regional Economics and Housing Finance, says that
with the recent changes in FHA’s insurance premiums it is worth reviewing the
agency’s impact on the market.  First, he
says, unit volume as above is only one way to measure FHA’s market share. It can be viewed as a share of:


…(read more)

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