Mortgage rates rise: Why and what it means for Central Valley residents

FRESNO, Calif. (KSEE/KGPE) – Those who are in the market to buy a home might not want to see this: Mortgage rates are up again.

This week, rates climbed .21% to 6.83% on the average 30-year home loan, the highest mortgage rates have been since February.

“A lot of uncertainty, a lot of fears of kind of ongoing inflation, both because the labor market is still tight and then there’s a lot of federal government policy that has the potential to impact consumer prices,” said Senior VP & Chief Economist Jordan Levine with the California Association of Realtors, or CAR.

Levine, who spoke with YourCentralValley.com on Thursday in light of the latest report from mortgage buyer Freddie Mac, laid out just some of the factors economists say have influenced a rise in mortgage rates. A big piece of that puzzle is the ongoing tariff battle with countries around the world, including China.

It’s a situation that could also have an impact on the value of new homes built throughout the Central Valley, the state of California, and the rest of the country.

“There’s a lot of dependency on the rest of the world for inputs to construction. Here in California, we’ve already got high costs because of fees and, you know, regulatory environment,” Levine said.

CAR cites the average California home value as over $884,350. The average Central Valley home is valued at $495,000.

With those values, heightened rates could cause concern, but Levine says where we currently sit is still right around historical averages.

And for prospective homebuyers, in this moment, he says there’s no reason to stop looking for that first or final home, yet.

“If rates do drop precipitously in the future and you’re in a home, nothing really precludes you from going out and taking advantage of that lower rate, saving some money on your monthly payment and all that stuff,” said Levine. “Meanwhile, you’re still paying down that principal balance, probably building equity as home prices continue to rise in California.”

There is some good news, though, as Levine and other economists expect rates to have a small drop sometime in the near future. He says the ‘floor’ of the rates could be around 6%.

But with current economic uncertainty, we’ll have to wait and see.