Not all doom and gloom as mortgage rates continue to increase. Kerri Cobb with Axia homes Loans in Susanville says rates have seen a dramatic increase over the last few weeks, increasing by a full two points above what was seen in January, yet those rates have stabilized. What is concerning is the cost of interest rates remains high in reacting to the volatile market. The Federal Reserve is expected to make another announcement about an increase in the prime lending rate that will affect the stock market. However, the difference here is that investors are not moving their money into the bond market for safety, which typically drives down the cost of interest rates. Cobb says it will be interesting what’s to come. Here in Lassen County Cobb says the effect would be that homeowners would own a home worth less than what they could have previously afforded as prices of houses have not come down in response to these higher interest rates. Another consequence, and not just seen locally, are regular working people won’t be able to afford to buy a home if rates continue increasing and the more financially able will buy, creating a potentially larger rental market. The county could also be facing a culture shift as the looming prison closure is forcing out younger families and more buyers from out of the area in larger metropolitan cities sell their homes for extreme amounts and relocate to rural areas like Lassen County with reasonable home prices as compared to bigger cities to work remotely or retire. Mortgage rates today are above the 5% mark which has not been seen for more than a decade.
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