Local real estate agents worry about the future as mortgage rates rise | New

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REDDING, Calif.- Against a backdrop of rising inflation and the recent Federal Reserve interest rate hike, the 30-year fixed rate mortgage rose to 5.78%. Rates averaged 2.93 this time last year.

Action News Now has spoken to several estate agents and mortgage lenders in Redding, and many are worried about the future of the market.








Benji Edwards is a mortgage lender at Only One Home Loans and says the market has stalled.

“You have mortgage lenders and you have real estate agents freaking out a bit because things have kind of stalled,” Edwards said. “So you’ve seen a real market downturn because you’ve got people who once qualified with a $1,800 payout who now have to pay $2,576.”

Cory Meyer, a local real estate agent, says sellers are more cautious about buying with rising interest rates.

For example, Edwards says the average sale price for a home in Shasta County is $430,000.

So if someone bought a house at that price and made a 20% down payment around November or December, their monthly mortgage payment would be around $1,800 per month.

But with the new interest rates, the same buyer would pay more than $2,500 per month.

“Affordability is a big challenge right now for homebuyers,” Meyer said. “So their buying power was much higher last year and they were able to buy more homes, and now they’re seeing that pullback in a big way.”

Most real estate agents and mortgage lenders Action News Now spoke to said an interest rate of 5% or 6% is close to average.

But with house prices as high as they are, soaring interest rates are preventing many people from paying the monthly mortgage payment on a home that was within reach just a month ago.

“We’re seeing more homes going out of contract because of interest rates, that’s one of the big reasons,” Meyer said. “When you go from a 2% environment to 6% today, it’s a drastic shock to the system.”

“So it might be a while before agents and sellers start to realize that buyers aren’t as keen on increasing their payments by $700 a month,” Edwards said. .

Many real estate agents told Action News Now that Shasta County has seen an increase in the number of homes on the market with around 600 available right now, but they say some homeowners may choose to take their homes off the market if they don’t. they can’t get what they think. it is worth it.

Some estate agents told Action News Now they fear a recession is brewing.

Many agents Action News Now spoke to went through the last recession in 2008.

Edwards told me that one of the big differences between 2008 and now is that rental prices are much higher, which could leave people who choose to seize left struggling to find rental accommodation.

“If people start losing their homes and if it’s similar to 2008, which we don’t know how it’s going to be, we definitely have an issue with where they’re going to live,” Edwards said.

“For sellers, everything is really relative. If you’re going to buy another house, whatever you’re selling on the market, you have to buy on the market,” Meyer said. “The hardest part is definitely how bad it gets, right?”

Estate agents and mortgage lenders Action News Now spoke to are unsure of what the future holds and say they will wait and see how the market continues to react to rising rates.

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