Shares of mortgage insurers declined amid concerns that the FHA price cuts would reduce the companies’ sales. Essent Group Ltd. fell 7 percent yesterday, NMI Holdings Inc. lost 4.5 percent and Radian Group Inc. slid 4.1 percent. MGIC slipped 2.8 percent.

Higher premiums have helped trigger a decline in FHA loan volume, which plummeted 19 percent in the nine months ending June 30 compared with a year earlier. The FHA had a 30 percent share of the mortgage insurance market in the third quarter of last year, down from about 69 percent in 2009, according to data from Inside Mortgage Finance.

NAR estimated total existing home sales to be about 4.94 million in 2014, a 3 percent decline from 2013. The Realtors’ association and 43 other consumer and housing-industry groups signed a letter to Obama yesterday urging him to make the premium cuts.

“The combination of higher pricing for lower-wealth borrowers along with other constraints on credit, such as lender overlays, poses a continuing serious challenge to the mortgage market as a whole,” the letter said.

Julian Castro

Republicans in Congress lashed out at Obama’s decision to cut premiums. Bob Corker, a Tennessee Republican who sits on the Senate Banking Committee, said it was “bad news for taxpayers” and “yet another irresponsible, head-scratching decision from the administration in regards to our nation’s housing finance system.”

Borrowers could end up defaulting, affecting the health of the FHA insurance fund, said Mark Calabria, director of financial regulation studies at the Cato Institute in Washington.

“This sounds like a move in the wrong direction,” said Calabria. “FHA has a portfolio of poor quality loans. This will end up costing the taxpayer considerably.”

Housing and Urban Development Secretary Julian Castro, who is scheduled to accompany Obama to Phoenix, said yesterday the fee cut would have a “marginal” impact on the insurance fund.

The agency is required to keep enough cash on hand to cover all projected losses in its $1.1 trillion portfolio. The insurance fund needed a $1.7 billion draw from the Treasury Department last year, the first in its history. The fund posted its first positive balance in two years in fiscal 2014.