The White House on Wednesday unveiled a plan to reduce lower mortgage insurance fees for first time home buyers.
According to a fact sheet released by the White House, the new FHA-insured mortgages aim to save some 850,000 homebuyers and homeowners in 2023 an average of $800 per year.
The FHA (Federal Housing Administration) charges fees to insure lenders against riskier home loans often taken out by lower-income buyers.
U.S. home sales dropped to their lowest level in more than 12 years in January as inflation-driven interest rake hikes pushed mortgage rates higher, often making real estate unaffordable for first-time buyers.
“Homeownership is currently the principal source of wealth creation for most American households,” the White House said. “But due to a nationwide shortfall in the supply of affordable homes and shifting demand for housing during the pandemic, first-time homebuyers have struggled in recent years to achieve homeownership.”
In fact, government data last week showed single-family homebuilding and permits for future home construction declining in January for the fifth straight month.
The 30-year fixed mortgage rate rose to an average 6.32% last week from 6.12% the week prior, according to data from mortgage finance agency Freddie Mac.
Vice President Harris was set to formally announce the first-time home-buyers’ relief plan at an event in the DC suburb of Bowie, Maryland on Wednesday.
