Homebuilders are lauding the Federal Housing Administration’s news that it is reducing the annual mortgage insurance premiums by 50 basis point.

While the news isn't good for private mortgage insurers who have been happily raking in market share gains at the expense of the government agency, the homebuilders are a different story, a Seeking Alpha article said.

The announcement is positive for first-time homeowners since it is projected that this reduction will translate into a $900 reduction in their annual mortgage payment.

Credit Suisse said KB Home (KBH) and D.R. Horton (DHI) most exposed to first-time buyers at approximately 50% and 40%, respectively, compared to Toll Brothers (TOL) and Meritage Homes Corporation (MTH), which see the least.

Most other builders have between 20-30% exposure, while Toll Brothers (~3%) and Meritage only see -3% and -10%, respectively.

However, Credit Suisse added that a stronger first-time buyer could benefit the move-up market as well.   

All stocks ended the day higher, with Lennar Corporation (LEN) up 2.47% and PulteGroup (PHM) up 3.08%.

But not all analysts agree with this. Sterne Agee analysts Jay McCanless and Annie Worthman said that while many in the industry would welcome the cut, it won’t have as big of an impact on housing as many expect, especially for homebuilders.

“We believe catering to buyers who have limited income and limited capacity to pay for upgrades (i.e. first-time and subprime buyers) will likely lead to lower gross profits for the average builder,” the analysts said.

“Some builders may compensate via volume, but in a market where home sales and ownership demand have not matched consensus expectations for several years in a row, we prefer builders who concentrate on older, move-up buyers bringing equity from their previous home to the closing table,” they continued.