Cut in premium won’t halt drop in FHA market share

bill which recently passed the House to cut the FHA upfront mortgage premium by 25 bps for first-time buyers who take a financial management course is too small to halt the downward trend in the FHA market share. While a weaker labour market will slow the improvement in average borrower credit standards, we still think the FHA share will edge back from 16.7% last year to around 15% by end-2020.

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