Realty Check
- Treasury On Mortgage Modifications
- Citi Mortgage Reveals What Treasury Won't
- Investors May Skew Housing Reality
- 100% Mortgage Financing From USDA
- Despite Government Aid, Foreclosure Crisis is Not Improving
- Housing Data Delivers Mixed Messages
- Appraisals Now Center Stage in Housing Recovery
- Underwater Mortgages Could Sink Even Deeper
- First Time Buyers Rescue Housing: Realtors
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
- U.S. Stocks Fall on Dubai Worries
- Black Friday at Best Buy
- Strategists on Dubai: Avoid 'Rash Moves' Now
- Longer Lines, Fuller Carts This Black Friday
- Dubai Stock Market Fear Has 'Legs': Dennis Gartman
- Obama's Emission Reduction Pledge Paints Future for Autos
- Is Super Bowl Halftime Act Too Old?
- Surprising Options Trades in TiVo Shares
- EA Sports Hopes to Pump Up Sales Through Pop-Up Locations
- Dubai's Debt Woes Signal New Era for Creditors
- Next Week: Cash In Now Or Wait For A Santa Rally?
- Fed Audit Would Hurt Economic Prospects: Bernanke
- Dubai Stock Selloff May Bring Buying Opportunity
- Longer Lines, Fuller Carts This Black Friday
- Big US Banks May Be Forced to Raise Capital: Bove
- Bank of America Amends Pay for Senior Executives
- Dubai Fallout Is a Correction, Not Another Crisis: El-Erian
- Tiger Woods Out of Hospital After Accident
RSS FEED
Text Size 
CNBC Real Estate Reporter
We've been talking a lot recently about the FHA and its new hold on the housing market. Officials have been throwing us numbers like 25 to 30 percent of total home sales are now with FHA-backed loans.
But a new survey from John Burns Real Estate Consulting really puts the regional breakout in perspective and shows the government's effect on the new construction market especially. Take a look at a survey of home builders. Again, this is new homes, not existing:
Percentage Of Home Buyers & Type Of Financing |
| REGION | CASH | FHA INSURED | JUMBO LOANS | OTHER CONFORMING LOANS | USDA | VA LOANS | DON'T KNOW |
| Midwest | 3% | 59% | 1% | 18% | 3% | 3% | 13% |
| Northeast | 7% | 41% | 8% | 28% | 2% | 6% | 8% |
| Northwest | 5% | 34% | 13% | 31% | 6% | 11% | 1% |
| Northern CA Region | 4% | 68% | 0% | 16% | 0% | 8% | 3% |
| Northern Florida | 6% | 47% | 2% | 15% | 16% | 9% | 5% |
| Southeast | 7% | 48% | 6% | 18% | 3% | 11% | 7% |
| Southern California | 6% | 48% | 15% | 19% | 0% | 8% | 3% |
| Southern Florida | 22% | 59% | 4% | 13% | 0% | 3% | 0% |
| Southwest | 7% | 45% | 6% | 24% | 2% | 6% | 10% |
| Texas | 6% | 45% | 12% | 23% | 4% | 7% | 2% |
| Avg Of All Responses | 7% | 48% | 7% | 21% | 4% | 7% | 6% |
So overall the survey finds that "59 percent of this year's sales have been dependent on FHA, VA or USDA financing programs with 96.5 percent to 100 percent LTV." It's that last part that makes me slightly nervous. We are supposedly past the whole "subprime" debacle; we've learned our lessons.
Our lending standards are supposedly higher, and yet 59 percent of new home buyers this year so far have not put even 5 percent down?
 |
I'm particularly concerned that this is in the new construction market, because that's where much of the trouble during the housing boom took place. A large percentage of new home buyers are first timers as well, so that's adding even more government cash to their pockets.
Also, in Southern Florida, 22 percent of buyers used cash, which implies that a large number of buyers there are investors; that, as we all know, is a double-edged sword.
Yes, FHA doesn't do the no-doc, low-doc loans and yes, they have far stricter underwriting standards than the bulk of the brokers did during the housing boom. But dare I express some concern here that all this government assistance, while eating up bloated inventory, could put us right back where we started in a few years?
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes