Dive Brief:
-
President Barack Obama’s decision to reduce new homeowners’ mortgage insurance premiums could translate into the sale of 45,000 additional new and existing single-family homes this year, Moody’s Analytics reported.
-
HousingWire quoted the report as saying the premium cut from 1.35% to 0.85% will spur at least 20,000 single-family housing starts this year and another 40,000 next year.
-
The increased sales and starts that could result from the Federal Housing Administration premium cut would spur the creation of 140,000 additional jobs in 2015 and 2016, the report said.
Dive Insight:
Combined with falling interest rates, lower down payments and looser standards for mortgage credit, the reduced premiums could spur even further interest in homeownership among first-time buyers who have struggled to save for homes as they pay increasing rents and repay student debt.
The FHA has said the reduced premiums would save new borrowers around $900 a year and could draw 250,000 more first-time buyers into home ownership.