How much lower would new home sales volumes have been without Uncle Sam's housing finance programs?
It's hard to tell for sure, but of all new home closings last year, 29% were financed with loans insured by the Federal Housing Administration and 14% were backed with mortgages guaranteed by the Veterans Administration, according to figures compiled by Housing Intelligence.
Back in 2005 – when subprime lending ruled the land – FHA accounted for just 5% of new home purchases, VA 2%. In 2008, when subprime cratered, FHA had a 25% market share, VA 7%.
The raw numbers are even more startling. While new home volumes dropped off the shelf by 75% between 2005 and 2011, according to the Contra Costa, Calif., research firm, the number of FHA transactions rose 23% during the same period and the number of VA deals rocketed by 43%.
