Low Mortgage Rates

With the recent spike in the mortgage rates, a lot of us Canadians are beginning to wonder if the home prices are going down? And the end of the housing boom is near. The belief is further aggravated and possibly supported by the fact that the housing market has been insane lately.

The  property values have been up by something like 20% over the past 12 months, which is an all time peak for the housing market. Surely it is speculated to have a respite following such impressive growth, especially if taking out a mortgage is now more expensive too. Right?

Unfortunately, for the future home buyers out there, this might be little more than fantasy.

There won’t be enough homes to buy

The supply demand imbalance would amplify, it was already prevalent when the pandemic first began. It has pushed the home prices out of reach for most of the first-time buyers. Consumer price inflation at a decade high has only made it worse.When that changes, expect home prices to drop.

Keep an eye out on the mortgage quality

The other piece to consider is mortgage loan quality. About everyone these days has a 30-year fixed or 15-year fixed mortgage.They’ve also got ridiculously low mortgage rates on these super boring loans. And they were underwritten using real income, asset, and employment documentation. But so far, the credit box remains pretty tight.The competitive housing market makes it difficult for the lesser-qualified borrowers to win a bidding war.

Although, there isn’t strong evidence of extensive decline in the housing market price, only moderating home price gains in most parts of the country.

While attempting to spot a correction in the market, you might look at where home prices have risen the most. While it isn’t necessarily sound logic, it’s something to be kept in mind nevertheless.

By the next year it could even be more pressure to buy a home before the low mortgage rates are really gone forever.

Looking to buy a house in this housing market?

Call our Mortgage Agent/broker to buy a house in such a competitive market and know the right time to lock the house of your dreams.