Facebook
Twitter
Pinterest
Copy Link
Interest Rates
At the latest FOMC meeting in September, the Fed opted not to raise interest rates, a notable respite from the near-constant hikes over the past year. This signals that inflation is coming down, (though still not yet in line with the stated goal of 2% the Fed is striving for). However, in some bad news for the Real Estate markets, the Fed also signaled that they may not be done raising rates, and rates may stay higher for longer than was anticipated. Stay tuned.
______________________
Flood Insurance
In dramatic 11th-hour fashion, Congress pushed through a resolution to keep the government open for the next 45 days, giving time for a longer-term deal to be hashed out. Along with the rest of the federal government, the National Flood Insurance Program (NFIP) was also extended 45 days. This means that homes that are in a flood plain requiring flood insurance, will be able to renew or get a new policy for the short term. However, Congress has been kicking the can down the road for so long with regard to the NFIP that this will be worth paying attention to. Since the NFIP’s last multi-year reauthorization expired over six years ago in 2017, there have been 26 short-term extensions, and 3 brief lapses. The NFIP needs reform and long-term authorization and funding. Until that happens, millions of homeowners will continue to face uncertainty over the cost of flood insurance.
______________________
New Insurance Rules
Governor Newsom and Insurance Commissioner Ricardo Lara have announced new rules for the homeowner’s insurance industry. Namely, insurance companies will now be allowed to consider climate change risks when setting prices. Currently, California does not allow insurance companies to consider current or future risks when determining how much to charge for an insurance policy. They may only consider what has happened in the past. The hope is that this change will stabilize the insurance market by inducing insurance companies to stay in California (and write more policies) and enticing back those companies who have left California in recent months & years. Notably, insurance companies will only get to consider climate change and future risks if they agree to write more policies for homeowners who live in areas with the most risk; including places like Shasta, Tehama & Siskiyou Counties with significant wildfire risk.
