just given diana olick since high praise let's bring her in with two big mortgage stories that have been developing today, applications and premium changes. >> right. look, i'm going to agree with my colleague, rick. that is what is behind this big news today from the fha. 3.5% required. sources telling cnbc that president obama will announce a significant reduction in the fha's annual insurance premium tomorrow. fha had been the loan of choice for first-time home buyers with not quite perfect credit but it began bleeding cash and went into the red. so it raised the premiums and credit scores leaving those much needed first time home buyers in the cold. the administration is looking to get buyers back, as well. for the average borrower this decrease could mean a savings of about $80 a month. another reason is that fanny and freddy announced a 3% down payment product which could cut into fha's business and hurt the ongoing repair of its portfolio by taking away the best borrowers. all of this as mortgage applications down 8% from a year ago according to mortgage bankers association.
"subdivisions" but maybe they were on to something because diana olick is with us along with nella richardson. is home ownership losing its luster? >> i think the suburbs are losing their luster. i would quote little boxes on the hillside but that's just me. what's so interesting is the home ownership rate going down is actually a factor of something really good that's going on in the housing market right now and that is that household formation quadrupled in the last report. a household being formed when junior moves out of the basement and forms their own household. all the fomrmation was on the rennren re renter side. >> as a counter point to that though, to what degree do you think young people don't have the same attitude towards owning anything whether it be a house or whatever? it's the sharing economy. it's the subscription economy. you pay until you've had enough, and then you move on, try something else. >> and it's also a very economic issue. it matters where you start your career. a lot of young people are choosing the cities and choosing to rent. but i have to say chil
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