President Barack Obama Wednesday moved to make it cheaper for first-time and younger buyers to take out a mortgage.

Obama lowered the mortgage-insurance premium for borrowers who have a down payment of just 3.5 percent of the total home’s purchase price and finance the rest of the purchase with a loan backed by the Federal Housing Administration.

The reduction is expected to save the typical first time homebuyer an average of $900 a year on the insurance, the White House said. The insurance is required because they’re financing so much of the puchase and the loans are riskier.

Existing homeowners who refinance into an FHA mortgage will see similar reductions, the White House said.

The White House estimated that the change will help 800,000 homeowners save on their mortgages and 250,000 new buyers save on mortgage payments over the next three years.

Obama, expected to highlight the lower cost mortgages during a visit to Arizona on Thursday, has been under pressure from the housing sector to help lower costs for borrowers seeking to buy with a low down payment – often younger buyers and first-time home buyers, both a crucial link in home sales.

“We do not see first-time buyers getting into the marketplace. They don’t have a chance to get onto that first rung of housing,” said Chris Kutzkey, president of the California Association of Realtors.

While mortgage lending rates have been near record lows for several years, that has benefited the most creditworthy borrowers, who are often the wealthiest of home buyers. The middle-income segment of the market, with higher debt loads, has faced tougher lending standards. Stagnant income has crimped their ability to put more down towards a home purchase.

“Mortgage underwriting standards have been overly stringent,” said Lawrence Yun, chief economist for the National Association of Realtors.

The premiums rose sharply after the financial collapse, and have not come down even as the economy and housing market have improved.

“It’s almost as if government is ripping off the consumers,” complained Yun, noting that premiums were raised to minimize risks to taxpayers of borrowers defaulting on government-backed loans. “But what has happened is they were punishing current borrowers for the sins of past mistakes. Current borrowers did not harm the market, but they are paying the excessively high premiums.”

One consequence is the shrinking number of new homeowners. Over the past four years, first-time home buyers shrank as a percentage of all FHA loans – from 56 percent down to 39 percent, he said.