More than any other product, conventional mortgages with low down payments, enabled by private mortgage insurance, have experienced the most growth between 2014 and 2018, almost doubling the number of first-time homebuyers they served from 346,000 to 684,000. Beginning in 2018, low down payment conventional mortgages have become the most widely-used mortgage product for first-time homebuyers. That trend continued in Q3, with a total of 209,000 first-time homebuyers using low down payment conventional mortgages (Figure 9), accounting for 35 percent of all first-time homebuyer purchases.
The broad rebound in the first-time homebuyer market this quarter also has boosted government lending, which continues to play a large role in the market, accounting for 43 percent of all first-time homebuyers. Government agencies operate three mortgage insurance programs that back FHA, VA, and USDA loans. Altogether, 251,000 first-time homebuyers used some form of government loans in Q3, up one percent year over year. FHA loans, which have traditionally been the loan product most used by first-time homebuyers, were used by 175,000 first-time homebuyers in Q3, unchanged from a year ago.