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Home Buying Trends to Watch Out for This 2018
If there are two topics that are always of interest to Canadians, that would be the weather and the real estate market. If we are not discussing impending blizzards, we’re talking about home prices. What’s driving the market? Do you think the mortgage rates will rise anytime soon? What we love about real estate talk is just like the weather, it’s always changing!
So, to provide you some material for your next small talk with your friends, here are some top real estate trends buyers and sellers should remember this year:
Prices Will Regress
Have you ever thought about how every time, they say that Canada’s housing market is going to crash? It just never happened! And according to analysts, it still won’t happen this year. In fact, the majority of the country’s real estate markets will continuously grow in 2018 but at a much slower pace compared to the substantial price increases in the last decade.
Rollercoaster Mortgage Rate
After years of remarkably low-interest rates, the Bank of Canada has finally increased its overnight rate. We would now start to see a rise in rates as it had been predicted in the last 10 years or so. However, this doesn’t mean that buyers can only expect increases in rates. In a market cycle, lenders typically drop the mortgage rates during spring and fall to attract the bulk of the new business. As the lenders are nearing the fiscal year-end, rates will start to go up too, especially with lenders who have already met their targets for the year. What does it mean for you if you plan to shop for a mortgage this year? Well, it means you should expect some rate volatility so it’s best for you to do your shopping or renewing in the spring or fall. If you can, avoid renegotiating around the end of the year.
30-Year Mortgages are Back
If you are a new homebuyer or looking to refinance, then this trend is for you. The newly implemented mortgage stress-test plus the threat of increased mortgage rates can affect a person’s chance of qualifying for a mortgage loan. A good solution is to go for a 30-year mortgage – this is still available to buyers with 20% equity in the home at least. Granted that you have to pay CMHC fees, but it may very well it, especially if it means you don’t have to face astronomical monthly mortgage payment or be instantly denied.
These are some of the trends that we’ll mostly see this 2018. It is widely believed that the housing market is on its way to getting more gains, although these gains are smaller than we used to see.
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