The Biden administration announced on Wednesday that it would lower US mortgage insurance costs for first-time home purchasers, saving around 850,000 borrowers $800 a year on a standard loan.

Vice President Kamala Harris will unveil the initiative to decrease costs on Federal Housing Administration (FHA) loans for first time home buyer at a ceremony in Bowie, Maryland, according to the White House.

The FHA levies the fees to protect lenders against riskier loans, which are often obtained by low-income homebuyers and first-time home buyers, Reuters reported.

Because of rising US mortgage rates and inflationary pressures, the number of house purchases in the United States dropped to its lowest point in over 12 years in January.

US mortgage financing company Freddie Mac reports that the average 30-year fixed mortgage rate increased from the previous week's average of 6.12% to 6.32%. The second consecutive weekly rise followed an increase in the US Treasury yields, per a report from US News.

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Rise in Homebuilders' Confidence Seen

While morale among homebuilders is still low, confidence increased to a five-month high in February.

In January, the median price of an existing property was $359,000, up 1.3% from the same month a year before due to price reductions made by sellers whose homes had been on the market for an extended period, according to CNBC.

It was the weakest yearly increase since February 2012. The average number of days a property spent on the market increased to 33 in January from 26 in December.

NAR chief economist Lawrence Yun said that "Buyers are starting to have stronger negotiation power" and houses lingering on the market for even more over 60 days may be acquired for roughly 10% lower than the initial listing.

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