The number of first-time home buyers entering the housing market is at a 27-year low, according to the National Association of REALTORS®, but the Federal Housing Administration (FHA) took big steps this week to rectify that. Just last week, the FHA announced a 50 basis points reduction in mortgage premiums that, according to President Obama, will serve two important purposes: enticing new home buyers and encouraging existing borrowers to refinance at lower rates.
NAMB, The Association of Mortgage Professionals, led by CEO Don Frommeyer, has been pushing its Washington counterparts to make lower premiums a priority. “This is a great first step in helping to make homeownership more affordable for folks on Main Street,” says Frommeyer. “But there’s still plenty of work to be done.”
FHA borrowers will realize as much as $900 in savings annually on a $200,000 mortgage, which arguably will be filtered back into the economy to encourage ongoing recovery.
Frommeyer and the NAMB membership think this move makes sense from an industry perspective. Now, borrowers with better credit will consider FHA loans as opposed to mortgages financed solely through Fannie Mae or Freddie Mac.
“We support anything that makes homeownership more accessible and more affordable for millennials and first-time homebuyers,” says Frommeyer. “The market simply is not going to recover at the speed it should unless we continue taking steps to recruit this demographic. This is excellent news for the industry.”
For more information, visit www.namb.org.