Have you been thinking of finally entering the housing market, but waiting for the best time? Well here it is! On April 12th the Bank of Canada decided to hold the Overnight Rate at 4.50%, which means we won't be seeing a change in the prime rate. Those with variable rate mortgages are stoked about the rate holds, because that means their mortgage payments remain the same. Another bonus, fixed rates are coming down! With all that said, it's a great time to compare interest rates and home prices from March 2022 to March 2023.
This Time Last Year 🗓️
In March 2022, the average price for a single family home in Canada was $794,957. Most home buyers were just starting to accept the fact that interest rates were on the rise for the foreseeable future. At this time, the going rate for a 5-year fixed insured mortgage was 3.84% and by the end of November 2022 the rates for the same mortgage were up to 5.29%.
In Real Time... 👇
The Canadian Real Estate Association released that the new avergae price for that same home in March 2023 is $686,371 (13.7% lower than last year). We are now in a declining market and a few short months after the peak in interest rates, many lenders are now offering rates as low as 4.54%* for a 5-year fixed insured mortgage (as of April 15th, 2023.) *Rates subject to approval and change without notice.
Consider this saying: "Marry the house, date the rate." This is telling you that the good deal you get on a purchase price is forever, but the interest rates vary. Prices have hit a low in January and are now increasing. Interest rates hit a high in November and are now decreasing. This means that it may be the perfect time to enter the housing market in Canada.
Get this. It is now $270/m cheaper to buy the same house today, than is was this time last year. Take a look at the comparison of purchasing a single family home in Canada March 2022 vs. 2023.
If we've learned anything about the real estate market is that it is impossible to predict - think about the pandemic, where purchase prices soared and interest rates plummeted. It's quite possible we will never see interest rates that low again, so the best we can do is tell you that now is an opportune time to get into the market.
Is Now A Good Time To Buy?
Many homebuyers have been waiting for real estate prices and interest rates to come down. January 2023 may have been the bottom of that downward spiral with the actual (not seasonally adjusted) average home price being $612,204 in Canada. Interest rates continue to go up and down, though many economists predict them to hold steady throughout 2023 or decrease by the end of the year.
If you were waiting for a sign to enter the housing market, this is it. 🔮