WASHINGTON -- The half-a-percentage-point reduction in the Federal Housing Administration mortgage insurance premium provided a bigger pop to the housing market than expected, according to Mark Zandi, chief economist at Moody's Analytics.

The premium reduction has been "very beneficial to the revival of the housing rebound," Zandi said during a Ginnie Mae conference Monday in Arlington, Va. "It helped to support higher home sales this year."

He also stressed that the increase in FHA purchase mortgage originations did not come at the expense of Fannie Mae and Freddie Mac loan volume.

Zandi noted that Fannie and Freddie's 3% downpayment programs, which were rolled out earlier this year, have been slow to gain traction.

Bill Cosgrove, the chairman of the Mortgage Bankers Association, called the premium reduction a "win-win."

It has allowed the FHA's credit quality to increase and become more competitive. When the FHA actuarial report comes out in October or November, it will show the financial condition of the mortgage insurance fund is "moving in the right direction," Cosgrove said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.