PHOENIX—Standing at the epicenter of the nation’s recent housing crisis, President Barack Obama on Thursday promoted plans to lower some mortgage insurance premiums, a move the White House says could save homeowners $900 a year and attract 250,000 first-time buyers.
The housing market in Arizona is drastically different than it was when Obama first visited the state weeks after taking office in 2009. The state’s foreclosure crisis has evaporated. Home prices have soared and are nearing pre-crisis levels.
“This progress is not an accident, it’s not luck,” Obama said. “It’s what happens when you have policies that put middle-class families first.”
Despite the rebound in the housing market, nationwide home sales slowed in 2014, as rising home values pushed many would-be buyers to the sidelines.
The rate cut Obama announced Thursday is aimed at getting more buyers into the market and helping homeowners who refinance save money. At the end of this month, the Federal Housing Administration mortgage premium will drop. Under the plan, the FHA will reduce its annual mortgage insurance premiums by 0.5 percentage points, to 0.85 percent. The White House says the reduction means new home buyers would pay $900 less a year than they would without the change.
In addition to the 250,000 new homebuyers the White House hopes to attract — a figure that marks a modest increase in sales — administration officials said the rate cut would help 800,000 homeowners who refinance their mortgages.
The president is in the midst of a three-state swing to preview his upcoming State of the Union address. Obama, who has often been cautious in extolling economic gains in order to avoid looking tone deaf to still-struggling Americans, is now talking more confidently about the economy. He said his goal this year is to make “everybody feel like things are getting better and we are moving in the right direction.”
Obama spoke at Central High School, just a few blocks from the hospital at the center of last year’s controversy over patient care at institutions run by the Department of Veterans Affairs. The president’s motorcade sped past the hospital, and White House aides said Obama had no plans to visit, noting that other administration officials have made stops at the hospital.
Throughout Obama’s presidency, Arizona has served as a symbol of the nation’s housing crisis and its recovery.
From The Associated Press