Would you be a better fit for renting or buying? In this post, we discuss both options, and where you might fit in.
If you’re entering the housing market as a home buyer this season, it’s good to start by learning about the current market trends. Real estate can be confusing, and you certainly don’t need to become an expert. However, it goes a long way to understand how you might fit into the market right now. Here’s what home buyers should know as they prepare to start house hunting!
Current housing prices
According to the Canadian Magazine of Immigration, housing prices in Halifax in mid-June were sitting at $529,500. This is an increase from a CTV News Atlantic article that placed prices between $400,000 and $500,000 back in May. It looks like housing prices have been on the rise this summer, perhaps due to the warm weather and temporary halt in rate hikes. However, since June we have seen more increases to the overnight rate, as the Bank of Canada continues to combat inflation. Today’s policy rate is five per cent, with both fixed and variable-rate mortgages experiencing rising prices.
We can’t yet tell how these ongoing rate hikes will affect housing prices down the line. In general, though, the more rates increase and the more expensive it is to hold a mortgage, the less demand there is for housing. This contributes to the potential for housing prices to stop rising as quickly. However, for the time being, home buyers should expect to pay higher prices for a home here in Halifax than in recent years. Our city keeps growing in popularity, and as a result we are starting to have to get used to these rising prices.
As we mentioned above, interest rates keep on rising! At the last Bank of Canada announcement on July 12, the overnight rate rose to five per cent, with the retail prime rate hitting 7.20 per cent. This is the highest overnight rate we have seen in more than 20 years, meaning we are far past the time of record-low rates we enjoyed during the pandemic. The central bank has referenced our continuously growing economy as a deciding factor in determining these rate increases.
Interest rates are well into the five and six per cent ranges, and are stretching beyond that in some cases as well. Mortgage financing is a pricey thing to take on right now if you are a home buyer! The Bank of Canada and other economists have suggested we are reaching the end of rate hikes for the year, but as we know, there are no guarantees. It’s important to prepare for higher mortgage payments this year if you are a future home owner.
Supply and demand
In June 2023, there were over 500 homes sold in the Halifax region. According to RE/MAX, there are currently 315 residential units for sale in the city, with the average time on the market sitting at around 39 days. This is a slower turnaround time than we have seen in recent years, implying that even though properties continue to sell in the area, they are taking longer to do so. As a home buyer, this means competition may be a bit less intense these days, and supply is having an easier time keeping up with demand. You don’t need to rush into the market or put an offer on the first home you see! You have options in today’s real estate market.
The importance of a mortgage broker
Now that you have this information about the market, do you really need to use a mortgage broker as a home buyer? The answer is yes! While it’s great to understand the basics about today’s market trends, it’s important to have a mortgage professional on your team when you start to actively get involved. We have experience in all kinds of market situations and every property type, and we can answer any questions you have along the way. Using a broker means having the best guidance when securing a pre-approval, mortgage product and rate, lender, and final approval. We will always direct you to the best path to ensure your experience is successful.
Entering the market as a home buyer can feel overwhelming, but we’re here to make it easy. As soon as you’re ready to get started, feel free to reach out to us! We are ready to help you secure the perfect mortgage product this season.
If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.