FHA borrowers account for about 10 percent of the buyers of the 2,705 units in homebuilder Meritage’s backlog, down from about 40 percent of the company’s total in 2011, before the insurance premiums rose and FHA loan limits were reduced, according to Seay. While Meritage sells mostly to move-up buyers, making more financing available to first-time buyers is important to the overall market health, he said.
“Most housing recoveries are based on starting at the bottom with first-time buyers and that provides a little more liquidity for move-up buyers,” he said.