Mortgage insurance (MI) premium rates have declined steadily for nearly a decade — even as nearly every other piece of the affordability equation for homebuyers has become more expensive.
In 2025, National Mortgage Professional reported a 25% decline in MI premiums since 2017.
For mortgage loan officers, the innovation and industry efficiencies that have helped lower MI prices is a very positive entry point for discussing how this homebuying tool facilitates more affordable down payments and expanded options. With MI, borrowers can move forward sooner with added flexibility in a challenging housing market.
The Down Payment Challenge
As MI costs have declined, other homeownership costs have increased sharply:
- Homeowners insurance premiums increased by nearly 70% over the past five years, according to data from ICE Mortgage Technology.1
- Home values are up more than 45% since 2020, Zillow reports.2
- The cost of building materials has risen by 40% since December 2020, according to the National Association of Home Builders.3
- Nationally, property taxes increased 30% from 2019 and 2024, according to the Institute of Taxation and Economic Policy.4
In this environment, 81% of prospective buyers in a 2025 Bankrate.com survey said down payments and closing costs are a significant obstacle, with more than half (52%) calling the challenge “very significant.”5
What’s Behind the Decline in MI Premium Rates?
In 2015, Arch MI reshaped the industry with the introduction of RateStar®, the first risk‑based premium pricing tool designed to better reflect individual borrower profiles.6 RateStar replaced static rate cards with more precise pricing and risk management based on each borrower’s specific risk profile, including debt‑to‑income ratio, down payment amount, local market dynamics and other factors.
Because lenders preferred this dynamic pricing approach for its greater precision, Arch MI’s innovation quickly became the standard for the industry.
In a 2025 report, researchers at the Urban Institute’s Housing Finance Policy Center said “risk-based pricing engines that more granularly tailor pricing to the risk of an individual loan are … putting downward pressure on premiums” together with better-than-expected delinquency performance and highly competitive MI market.7
MI helps borrowers qualify for loans with lower down payments:
60% of buyers using Arch MI are first-time homebuyers.
139,000 families in the U.S. attained homeownership with Arch MI in 2024.
Homeownership is the largest driver of household wealth.8
Source: Arch Capital Group Ltd. 2025 Sustainability Report.
Helping Make Homeownership a Near-Term Prospect
Realtor.com reports that the typical U.S. homebuyer needs about seven years to save for a down payment. Arch MI’s Buy with MI solutions can shorten that timeline with products that support down payments as low as 3% for qualified borrowers, with even lower options available through coverage from Arch Mortgage Guaranty Company (AMGC). For buyers who are financially prepared but limited by upfront cash, Buy with MI helps turn homeownership into a nearer‑term opportunity rather than a distant goal.
We’d love to hear your perspective on how to make homeownership more attainable in today’s challenging market. What role do you see MI playing in improving affordability — and what other ideas or solutions could help more buyers move forward? Share your thoughts with us by emailing [email protected], and join our ongoing discussion on expanding access to homeownership for qualified borrowers.
1 CBS News: Homeowners Insurance costs Have Shot Up 70% Since 2021 (Sept. 17, 2025). https://www.cbsnews.com/news/insurance-for-homeowners-premium-rates/
2 Zillow: Home Values Have Grown Twice as Fast as Normal Since the Start of the Pandemic (Feb. 27, 2025). https://www.zillow.com/research/pandemic-home-values-rents-34896/
3 National Association of Home Builders: How Tariffs Impact the Home Building Industry (Feb. 11, 2025). https://www.nahb.org/advocacy/top-priorities/building-materials-trade-policy/how-tariffs-impact-home-building
4 Institution on Taxation and Economic Policy: Housing Affordability and Property Taxes (March 19, 2025). https://itep.org/housing-affordability-and-property-taxes-how-to-actually-move-the-needle/
5 Bankrate: 4 in 5 Aspiring Homeowners City Down Payments and Closing Costs as a Significant Obstacle (Feb. 26, 2025). https://www.bankrate.com/f/102997/x/68dd39e334/down-payments-survey-press-release.pdf
6 Arch MI (Sept. 2025) https://mortgage.archgroup.com/wp-content/uploads/sites/4/MCUS-B1290-Counter-Party-Financial-Strength-NR.pdf
7 Urban Institute Housing Finance Policy Center: Mortgage Insurance Data at a Glance (Dec. 2025). https://www.urban.org/sites/default/files/20252/Final_Mortgage_Insurance_Data_at_a_Glance_2025_0.pdf
8 National Association of Realtors 2006 Generational Wealth & Housing Report. https://www.realtor.com/research/2026-generational-wealth/?msockid=309ecdf36c2f6b1e2fa7db056d6c6a45