Waiting To Buy?

Are you in the situation where you're ready to buy but want to wait and see how the market reacts to all these changes such as mortgage rates increasing, real estate mortgage rule changes, Bank of Canada rates changing?

Well, yes I will say that speculating on how the market will change may save you money, but it can also hurt you as well. In our current market there has been a decrease in sales and an increase in inventory. Which means the supply and demand has shifted and we are edging into a buyers market. How many other people may be thinking the same thing as you, thinking maybe we should wait for a couple of months and see how things go. A lot is the answer. With a combination of summer months ahead and an increasing large inventory, why wait until everyone starts to buy again and the market changes from a buyer to sellers market? Not only will the fall bring buyers aggressively trying to buy a house or condo but mortgage rates may increase as well. Now you've lost out on making bids below list price and are competing against several other buyers. You've also possibly lost out on current great mortgage rates which may increase over the next two or three months and if the rates rise fast enough that erases any sort of gains you've made on price. So does waiting really benefit you? If you're a first time home buyer sometimes the best thing to do is forget about market timing and do whats currently best for you. If you can afford to buy then that's probably the right time to do it.

Big Banks Start Increase in Mortgage Rates

Monday saw an announcement from 3 of Canada’s big banks to suddenly raise their mortgage rates by up to .6%. Royal Bank of Canada, TD Canada, and Laurentian Bank made changes to their closed mortgages of three, four and five year terms that came in affect as of today. This will see an increase of about 1.5% within a year to finance a home. This was bound to happen sooner or later as the rates were already very low. This will become a trend as the other banks will follow suit to these sudden changes. Variable rates did not change but everyone is predicting that they will increase sometime this year which will be influenced by the Bank of Canada. The low lending rate was suppose to help stimulate the economy but we have seen many indications that the economy is steaming along including the real estate market and in order to cope with inflation these rates are bound to go up. The only thing that confuses me about this sudden change in mortgage rates is that just last week we saw a slight drop in the rates which is nothing really to spend your time thinking about. One thing I will anticipate in the next few months, for those that locked in a rate hold and the combination of spring and an increase in consumer confidence, it’s going to be a busy real estate market.

Improved But Balanced

We are now just over a month into the New Year and we have already seen signs of how the year is going to turn out. With mortgage rates still low, houses are affordable and we are seeing a lot of sales to prove that people are taking advantage of the low mortgage rates. This year for the month of January single family home sales was up 39% and the condominium market was up 67% from January 2009. A good sign that the market and the economy has improved. We may see this improvement, but do not take this the wrong way and think that prices and the real estate market will see another boom. The market has just corrected itself and we may just see a balanced and steady market over the year. Prices have adjusted over the year and we find ourselves with an inventory of houses that is normal for this time of year. For a lot of people that are looking to buy a new home or may be first time home buyers, the decision to rent or buy is a question that may change one’s mind when looking at the low mortgage rate. It will definitely bring new home buyers into the market in 2010.