The share of borrowers using FHA loans fell to its lowest level in 27 months in February, according to housing data firm DataQuick.
Per company stats, just 33.3 percent of purchase money mortgages originated last month were FHA loans, down from 34.2 percent in January and 38.2 percent a year ago.
Last month’s numbers were the lowest since November 2008, when FHA loans accounted for 33.0 percent of all purchase mortgages.
During the current housing cycle, the FHA loan-share peaked at 41.1 percent of all purchase mortgages in November 2009, but has since “eroded fairly steadily.”
Regionally, FHA loan use was as low as 10.3 percent in Honolulu, Hawaii, and as high as 43.2 percent in Orlando, Florida.
The median price paid for a home purchased with an FHA loan was $195,000 last month, unchanged from January, but down 2.5 percent from $200,000 a year ago.
The median FHA purchase loan amount was $187,668, up minimally from $186,500 in January, but down 4.4 percent from $196,278 last year.
FHA loans surged in popularity after the mortgage crisis all but wiped out subprime mortgage lending, but recent changes including a minimum credit score and higher mortgage insurance premiums may have dented demand.
Meanwhile, VA loan volume increased slightly from a year ago, accounting for 6.4 percent of home purchase mortgages, up from 5.5 percent last year.
However, VA loan lending is down from its recent peak, when it grabbed a 6.7 percent purchase-share in December 2010.