Redding's Ups and Downs

Increasing the dollar amount of jumbo loans could help our economy. These loan amounts are set each January and have interest rates higher than a conforming conventional loan. Today the loan cap for jumbo loans is $417,000 dollars, with interest rates around 7 percent. Today, a conventional loan can be as low as 5.2 percent. What home buyer would be willing to buy a home at 7 percent when others that buy a home for less money could get a loan for around 5 percent? Jumbo loans are literally frozen in their tracks.

Shasta County does not have a huge amount of homes for sale over 417,000 thousand dollars. In fact, today, there are 380 homes out of 1524 for sale in Shasta County. But in other areas of California, such as the Bay area, most housing starts at over 417,000 dollars.

If our government would raise the limit on jumbo loans, it would help our economy. More buyers could take advantage of lower interest rates and more sellers would buy homes in Shasta County that want to retire here. Our economy needs all the help it can get and I believe this would at least be a small step toward improving the housing market.