White House to roll out plan to lower first-time home buyers' mortgage costs

(Reuters) - The White House on Wednesday will unveil a plan to reduce mortgage insurance fees charged to first-time home buyers, helping an estimated 850,000 borrowers save about $800 a year on the cost of a typical loan, it said in a statement.

Vice President Kamala Harris will announce the plan to lower fees on Federal Housing Administration (FHA) loans at an event in the Washington suburb of Bowie, Maryland.

The FHA charges the fees to insure lenders against riskier loans often taken out by lower-income home-buyers.

U.S. home sales dropped to their lowest level in more than 12 years in January as inflation-driven interest rake hikes push mortgage rates higher, often making property unaffordable for first-time buyers.

Government data last week showed single-family homebuilding and permits for future home construction declining in January.

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. The second straight weekly increase reflected a spike in U.S. Treasury yields.

(Reporting by Dan Whitcomb; Editing by Jamie Freed)