San Diego Union-Tribune (Sunday)
First-time home buyers look beyond FHA loans
For first-time homebuyers, obtaining a home loan backed by the Federal Housing Administration is often the first choice. It allows for low down payments and less stringent credit requirements, and the loans are often widely available. But according to a new analysis from the National Association of Realtors, the latest trend for first-time buyers is to seek out a conventional loan over Fha-insured financing.
According to the Realtors Confidence Index Survey, 59 percent of first-time buyers obtained conventional confirming loans in January 2021 compared to just 24 percent who obtained an Fha-insured home loan. This is up from 57 percent of firsttime buyers in 2020.
For years now, many lenders have offered low down-payment loans for first-time buyers that compete with FHA loans but avoid the costly mortgage insurance often tied to Fha-backed financing.
Today, conventional conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.375 percent.