Climate Risk Is the New Credit Risk

How Climate Risk is Changing Mortgage Lending in Southern California

As wildfires, floods, and other extreme weather events become more common in Southern California, they’re doing more than reshaping the landscape—they’re starting to reshape the mortgage industry.

A new report from First Street Foundation, a leading climate risk modeling firm, reveals a growing trend: mortgage lenders and insurers are beginning to factor climate exposure into lending decisions. This means that traditional metrics like credit score and income are no longer the only considerations when evaluating a borrower’s eligibility or a property’s value.

Why Climate Risk Now Matters in Real Estate and Lending

For years, climate-related risks were considered secondary when buying or refinancing a home. But today, the financial risks tied to natural disasters—especially in high-risk zones across California—are becoming harder to ignore. From rising insurance premiums to sudden shifts in property values, climate is now a key variable in your home’s financial health.

Key Insights from the First Street Report

If you’re a homeowner or prospective buyer, here’s what you need to know:

• Foreclosure Rates Are Higher in Climate-Risk ZonesProperties located in wildfire-prone or flood-prone areas are seeing increased rates of default and foreclosure. This is due in part to costly repairs, insurance gaps, and decreased home values after major events.

• Insurance Premiums Are on the RiseHomeowners in high-risk areas are facing sharp increases in insurance costs—or worse, losing coverage altogether. This can dramatically affect monthly budgets and long-term financial planning.

• Mortgage Terms May Shift Based on LocationLenders are beginning to adjust borrowing terms based on a home’s exposure to climate risks. This could mean higher interest rates, stricter approval processes, or additional documentation requirements for properties in vulnerable areas.

  
  

What You Can Do to Prepare

This information isn’t meant to alarm—it’s meant to empower. Understanding how climate risk intersects with homeownership allows you to make smarter decisions moving forward.

Here are a few ways to stay ahead:

• Evaluate your home’s climate risk profile. Tools like Risk Factor™ or your local hazard mitigation map can help.

• Talk to your lender or mortgage advisor about how location might influence borrowing terms.

• Plan for rising insurance costs by budgeting conservatively and comparing providers annually.

• Consider climate-resilient upgrades if you're remodeling or renovating, especially in high-risk zones.

  
  

Final Thoughts

Climate risk is becoming a core part of the real estate conversation in Southern California. Whether you’re buying, refinancing, or planning renovations, understanding this shift can help you make more informed—and resilient—financial decisions.

Want to talk through how climate impacts your mortgage options? Our team at Peregrine Financial is here to help. We offer personalized guidance so you can plan with confidence, no matter what the future holds.

Bitcoin Surpasses $100,000: What’s Fueling the Surge and What It Means for Your Financial Plan

Bitcoin has once again crossed the $100,000 threshold, reaching an intraday high of $101,370—the highest level since early February 2025. This resurgence is attributed to a confluence of factors, including easing global trade tensions, increased institutional investment, and supportive political.

Wall Street's Renewed Interest in Cryptocurrency

Major financial institutions are significantly increasing their engagement in the cryptocurrency market. High-frequency trading firms and asset managers are expanding their crypto-related services, indicating a long-term commitment to digital assets. This institutional participation is bolstering market confidence and liquidity.

Political Developments Boosting Market Sentiment

The announcement of a new U.S.-U.K. trade agreement has alleviated investor concerns over global trade tensions. This development, coupled with President Trump's ongoing support for cryptocurrency initiatives, has contributed to the positive market sentiment driving Bitcoin's price upward.

Implications for Investors

The convergence of institutional investment and favorable political developments suggests a transformative period for Bitcoin and the broader cryptocurrency market. For investors, this presents an opportunity to reassess portfolio allocations and consider the role of digital assets in long-term financial planning.

How Peregrine Financial Can Assist

At Peregrine Financial, we are committed to helping our clients navigate the evolving financial landscape. Our team offers personalized guidance to assess how developments in the cryptocurrency market may impact your financial goals.

Contact us at (661) 505-8300 or info@peregrinefinancial.com to schedule a consultation.

Mortgage Rates & Fed Outlook: What May 2025 Means for Homebuyers and Homeowners

As the Federal Reserve kicks off its two-day policy meeting this week (May 6–7, 2025), financial markets, real estate professionals, and homeowners alike are watching closely. The decisions made by the Fed could have a significant impact on interest rates, inflation control, and the overall direction of the U.S. housing market.

At Peregrine Financial, we specialize in helping our clients navigate changing financial conditions with confidence. Here’s your comprehensive update on mortgage trends, housing market activity, and what to expect in the months ahead.

Are Mortgage Rates Going Up or Down in 2025?

As of May 6, 2025, the average 30-year fixed mortgage rate sits at 6.83%, while the 15-year fixed rate averages 6.01%. For homeowners looking to refinance, the average 30-year refinance rate is currently 6.91%.

Although these rates remain elevated compared to historic lows seen in 2020–2021, they have held relatively steady over the past few weeks. Most experts forecast that mortgage rates will remain within the 6%–7% range through the rest of 2025, barring any dramatic shifts in monetary policy from the Federal Reserve.

Housing Market Trends: Signs of Activity, But Affordability Concerns Persist

The U.S. housing market is showing mixed signals:

• Pending home sales rose sharply in March, up 6.1% month-over-month, the largest gain in over a year. This signals increased buyer interest as consumers adjust to the new interest rate environment.

• However, mortgage application volume has declined, and affordability remains a major hurdle. The average monthly mortgage payment in the U.S. has climbed to $2,870, marking a new high.

For many prospective homebuyers, elevated home prices combined with high mortgage rates are making homeownership feel out of reach—even as demand shows signs of rebounding.

What Is the Federal Reserve Expected to Do Next?

The May 2025 Federal Reserve meeting is expected to result in the Fed holding interest rates steady, as policymakers continue balancing inflation control with the goal of maintaining economic growth.

Additionally, new tariff policies on imported construction materials could drive up renovation and homebuilding costs. This may put upward pressure on home prices and limit supply in certain markets.

Key Takeaways for Homeowners and Buyers

• Mortgage rates in May 2025 remain high, though fluctuations have been minimal in recent weeks.

• Buyer demand is recovering, as seen in the surge of pending home sales, but affordability remains a serious concern.

• Economic policy, Fed decisions, and global trade developments will continue to shape the housing market and interest rate trends.

  
  

Should You Buy, Sell, or Refinance in 2025?

If you're wondering how today’s market conditions affect your financial goals—whether you're purchasing a home, considering a refinance, or exploring investment opportunities—our team at Peregrine Financial is here to guide you.

We combine deep market insight with personalized strategy to help you make informed, confident decisions in any market.

Contact us today to schedule a consultation.