The share of new home sales backed by Federal Housing Administration (FHA) loans increased to 14% in the second quarter from 12.1% in the first quarter, according to a new data analysis from the National Association of Home Builders (NAHB).
The second quarter’s percentage was the largest since the first quarter of 2021, although it was about three percentage points lower than the post-Great Recession average.
Conventional loans were still the dominant force in the second quarter mortgage market, financing 73.7% of new home sales – but the share of that product dipped by 1% from the previous quarter and dropped 2.7% from one year earlier. The media price on new homes financed by conventional and FHA loans were $458,100 and $346,500, respectively – the national median sales price of a new home was $416,100.
“Cash purchases made up 6.5% of new home sales in the second quarter of 2023,” said David Logan, NAHB director of tax and trade analysis. “The share has declined each of the past two quarters and is down 4.2 ppt over that period. The share of cash purchases has decreased 2.9 percentage points over the past year and has ranged from 4.1% to 10.7% since Q2 2020. Although cash sales make up a small portion of new home sales, they constitute a larger share of existing home sales. According to estimates from the National Association of Realtors, 26% of existing home transactions were all-cash sales in June 2023, up from 25.0% in May and June 2022.”