If buying a home is on your horizon, now is the time to gather information and be educated. Knowing how current market influences will affect your purchasing power is key to you making the best choice for you.
With that in mind, let’s talk about what recent and impending interest rate hikes will mean for you.
How Much is the Increase?
The Bank of Canada has recently raised its key interest rate to one and a half percent, up from 1 percent. And unfortunately, more increases are expected moving forward.
The Downside?
The interest rate hike will have a large impact on affordability for people looking to enter the current market. The homes available within buyers' budgets may shrink. Previously, for example, a hopeful buyer may have been approved for a $750,000 home, but after the hike, that could drop by $100,000. That will leave potential buyers with a far smaller pool of homes to choose from when shopping for a property.
Similar to 2019 Rates
However, something that not a lot of people are talking about is that despite the increase, interest rates over the past few months are very similar to what they were in 2019. It’s important as a hopeful buyer to be focused on what your real estate goals are, and not spend so much time worrying about the increase.
There are some good opportunities on the market if you’re a buyer, and sitting on the sidelines thinking about what’s going to happen will only cause you to miss out. Now is the time to buy.
Home Prices Have Come Down
Historically, there’s been a correlation between interest rates going up and home prices going down. This could be a benefit for anyone looking to break into the current market. We are seeing this effect on pricing already due to the interest rate increases as well as a result of more properties coming to market.
If you are already a homeowner and have a fixed-rate mortgage, no need to worry – you won’t see any change in your interest rate until you renew your mortgage.
Looking to make a move?
In today’s tough market, you’ll want to have an experienced real estate agent on your side, who can guide you in making the best decisions for you. I’m honest, knowledgeable and upfront, and will tell you exactly how it is so that there are no surprises along the way.
My clients tell me I’m just the right blend of friendly and fierce when I’m working to find the home of their dreams. I would love to work with you to find the perfect home for you and your family!
Contact me today
I would love to hear from you, and talk to you more about how the current market situation benefits you. You can contact me today with any questions or just to chat further at 416-820-3006. You can also reach me by email at daniellagoldre@gmail.com, or through the contact portal on my website at https://daniellagold.ca/contact. If you’re looking for more information, you can visit: https://daniellagold.ca/.
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