If you’re shopping for a new home, expect mortgage rates to keep rising into 2024.8 So, you’ll need to act fast if you want to get in at a lower rate. However, the cooling effect should make for a less competitive market. We can help you chart the best path.
If you’ve been thinking about selling, higher mortgage rates may shrink your pool of potential buyers, so don’t wait too long to list. And if you are up for a renewal, you should also act quickly or risk paying a higher rate. Contact us to discuss your options.
DEMAND AND PRICES ARE STARTING TO SOFTEN IN SOME SEGMENTS
If you’ve been waiting to buy a home, now may be the perfect time to jump in the market. There are deals to be found if you know where to look. But don’t wait too long, or higher mortgage rates will erode any cost savings. We can help you find the best opportunities in today’s market.
For homeowners, the outlook is still bright. Governmental interventions are being put in place to stabilize the market–not crash it. And demand for housing and a strong job market should help protect your investment.
INVENTORY REMAINS TIGHT
According to the CMHC, housing starts trended higher in April after a small downturn in March. Overall, new homes are still being built at a faster clip today than in the past, but at a slower pace than we saw in 2021, noted CMHC Chief Economist Bob Dugan.13 Homebuilders are facing a wide range of challenges, including persistent inflation, rising rates, and ongoing labour shortages.
Increased federal investment could help counteract at least some of those challenges. The federal government recently announced plans to help double the pace of housing construction over the next decade by funding significantly more new and affordable housing. It also announced additional relief measures, including a temporary ban on foreign investment, doubling first-time buyers' tax credit, and halting blind bidding wars.14
In addition to fewer homes being built, new listings are also down, according to the CREA’s sales report. But a decrease in demand is offsetting the impact in some areas. “A little more than half of local markets were balanced markets…a little less than half were in seller's market territory.”11
What does it mean for you?
While supply remains at historically low levels, even a modest bump in inventory can help take pressure off of buyers. If you’ve had trouble finding a home in the past, give us a call to discuss what we’re currently seeing in your target neighbourhood and price range.
If you’re a homeowner, it’s still a great time to sell and cash out those big equity gains. Contact us to find out how much your home is worth in today’s market.
WE’RE HERE TO GUIDE YOU
While national real estate trends can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighbourhood.
If you’re considering buying or selling a home, contact us now to schedule a free consultation. We can help you assess your options and make the most of this unique real estate landscape.
1. Bank of Canada - https://www.bankofcanada.ca/2020/03/press-release-2020-03-27/
2. Global News - https://globalnews.ca/news/8516543/canada-home-sales-record-crea/
3. CBC -https://www.cbc.ca/news/business/crea-housing-february-1.6385274
4. Canadian Real Estate Association - https://www.crea.ca/housing-market-stats/stats/
5. Canada Mortgage and Housing Corporation - https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2022/housing-markets-moderate-historic-2021-levels
6. Bank of Canada - https://www.bankofcanada.ca/press/press-releases/
7. Reuters - https://www.reuters.com/world/americas/bank-canada-says-strong-demand-risks-higher-inflation-2022-05-03/
8. Better Dwelling - https://betterdwelling.com/canadian-mortgage-rates-to-surge-demand-will-be-slowest-in-recent-history-moodys/
9. CBC -https://www.cbc.ca/news/business/crea-housing-december-1.6317503#
10. Canadian Real Estate Association - https://www.crea.ca/news/march-home-sales-and-new-listings-ease-back-following-surge-in-february/
11. Canadian Real Estate Association - https://www.crea.ca/news/home-sales-drop-in-april-as-mortgage-rates-shoot-higher/
12. Global News - https://globalnews.ca/news/8716412/canada-housing-market-cooling-bubble-interest-rate/
13. Canada Mortgage and Housing Corporation - https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2022/canadian-housing-starts-trend-higher-april
14. Office of the Prime Minister of Canada, Justin Trudeau - https://pm.gc.ca/en/news/news-releases/2022/04/13/helping-young-people-get-housing-market