DataQuick: FHA Loans Decline, VA Loans Up

April 5, 2011 (Shirley Allen)
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DataQuick reports that the share of borrowers using government insured FHA loans fell to a 27 month low in February to 33.3 percent of all mortgages based on an analysis of 20 large housing markets nationwide. Meanwhile, the number of VA mortgages increased from a year ago to 6.4 percent, compared to 5.5 percent a year earlier.

The report cites the trend is likely due to a combination of factors, including the government’s recent changes to qualifying standards for FHA mortgages and even tighter requirements from lenders for the low down payment loans. Other factors noted in the report pertained to the weak economic climate including weak job growth, concerns over job security, and the number of underwater borrowers who lack the ability to pay off their current mortgage in order to purchase another house.

Regionally, the numbers of borrowers who purchased their homes with an FHA loan varied widely with as little as 10.3 percent of all purchase loans in the Honolulu area obtaining an FHA loan to 43.2 percent of purchase loans in the Orlando region obtaining an FHA loan.

During the current housing cycle, FHA loans peaked at 41.1 percent of all home purchases in November of 2009 and have been dwindling since then. February’s figure was down from 34.2 percent in January and 38.2 percent in February 2010.

The median price for a home bought with an FHA mortgage was $195,000, which was the same as January, but down 2.5 percent from February of 2010, when the median price was $200,000. The median loan amount in February was $187,668, which was up from $186,500 in January but down 4.4 percent in February of 2010.

Percentage of home purchase loans that were FHA:

Metro area* Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Peak month since ’07**
Baltimore 4.4% 14.2% 42.5% 44.0% 41.2% 50.8%
Chicago 2.4% 5.9% 34.0% 40.9% 35.4% 43.3%
Denver 5.7% 15.7% 40.3% 47.9% 35.9% 53.4%
Honolulu 0.2% 1.4% 9.9% 14.9% 10.3% 19.0%
Las Vegas-Paradise 1.0% 22.3% 45.2% 47.5% 41.8% 55.1%
Los Angeles/Orange 0.2% 2.0% 31.3% 33.1% 29.5% 33.1%
Miami 1.0% 6.6% 39.1% 45.8% 42.0% 47.1%
Nashville 9.0% 20.1% 38.0% 47.1% 39.1% 53.8%
New York 1.3% 4.7% 22.1% 23.0% 22.0% 29.5%
Orlando 0.9% 12.7% 40.5% 45.7% 43.2% 49.9%
Phoenix 2.1% 20.7% 40.4% 41.3% 33.7% 55.3%
Portland 1.3% 8.1% 29.6% 37.3% 32.6% 42.3%
Riverside, CA 0.5% 16.2% 49.1% 47.2% 40.8% 51.1%
Sacramento, CA 0.3% 11.6% 37.1% 45.3% 35.7% 45.3%
San Diego 0.3% 2.8% 28.0% 29.2% 24.4% 31.3%
San Francisco 0.0% 1.1% 22.0% 25.5% 22.2% 26.3%
San Jose, CA 0.0% 0.0% 17.3% 18.9% 16.5% 22.3%
Seattle 0.8% 7.1% 31.0% 34.2% 30.1% 39.9%
Tampa 1.8% 15.6% 37.2% 37.6% 34.6% 45.7%
Washington D.C. 1.1% 10.5% 40.1% 43.3% 37.3% 45.8%

Percentage of home purchase loans that were VA:

Metro area* Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Peak month since ’07**
Baltimore 1.6% 4.3% 6.5% 9.2% 9.9% 10.7%
Chicago 0.5% 0.9% 1.9% 1.8% 2.8% 3.4%
Denver 1.4% 2.9% 6.0% 5.3% 6.6% 7.3%
Honolulu 5.3% 10.9% 23.1% 15.4% 18.9% 23.1%
Las Vegas-Paradise 1.1% 5.5% 10.3% 9.8% 10.4% 11.4%
Los Angeles/Orange 0.1% 0.4% 2.0% 2.2% 2.4% 2.6%
Miami 0.2% 0.6% 2.3% 2.7% 2.2% 3.8%
Nashville 2.2% 2.1% 4.9% 4.3% 6.0% 6.7%
New York 0.1% 0.4% 0.8% 0.6% 1.1% 2.1%
Orlando 0.7% 2.5% 5.3% 4.9% 4.9% 7.0%
Phoenix 1.2% 3.5% 6.2% 5.9% 6.6% 7.6%
Portland 1.2% 2.0% 4.9% 5.6% 5.5% 9.1%
Riverside, CA 0.3% 3.9% 6.7% 7.6% 8.2% 8.5%
Sacramento, CA 0.3% 2.4% 4.0% 4.3% 4.7% 5.3%
San Diego 0.3% 3.1% 15.0% 11.9% 15.3% 15.3%
San Francisco 0.1% 0.1% 2.1% 1.3% 2.1% 2.1%
San Jose, CA 0.0% 0.1% 1.0% 0.8% 0.9% 1.8%
Seattle 1.4% 3.6% 10.3% 8.6% 10.6% 11.3%
Tampa 1.8% 4.3% 9.9% 9.2% 9.1% 11.1%
Washington D.C. 1.4% 5.6% 12.3% 10.9% 13.8% 13.9%

Tags: DataQuick, FHA mortgage loans, VA mortgage loans, government insured loans, home purchase loans, qualifying standards, low down payment loans, underwater borrowers, weak job growth, job security

*Includes all or at least the core counties in each metro area.
**Peak month could include any calendar month; not just February.
Note: Feb. ’11 data are preliminary for Washington D.C., New York and Tampa.

Sources:
DataQuick Information Systems
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