ca.finance.yahoo.com/news/majority-aspiring-homeowners-awaiting-rate-161218712.html
Majority of aspiring homeowners awaiting rate cuts before buying: BMO survey
WSJ had an article this weekend where they hypothesized that rates will level out at ~4% long term. Which is still substantially more than the pandemic lows
It's what I'm banking on, although I'd love to be proven wrong for aspiring homeowner's sake.
For aspiring homeowners, it would lower prices in the long term if there are no buyers at these price points because of rates.
If speculators don’t have access to cheap credit anymore and they’re negative cash-flow on rent.
If the housing mania slows down. Really the only thing propping up the housing market was cheap credit, poor zoning, and poor immigration policies.
The only ones who deserve any sympathy are the mortgage holders who live in their home who got caught up in this mess.
Always buyers supply just keep drying up
The BoC stated that their neutral rate is 2.25% and 3.25. Admittedly they raised it from 2% - 3% by 25bps, but it’s nowhere near the 4% that WSJ is suggesting.
This is completely incorrect because you cannot know where the neutral rate is definitively.
I’m telling you what the BoC said.
They also had no idea that mortgage interest inflation would rise rent and shelter inflation, so I'm not sure they know what they are doing.
I agree with you on that.
Might be higher than that now. I know id seen a broker a bit more than a week ago and the 3 years got cranked to try to get people to lock into 5 year. Overall everything went up after what he said ea gov spending (assuming maybe he meant the bond buying). 5 year was just under 5% for CMHC, for non CMHC was looking at 5.29. I lost my phone through divorce but he always steered us well in the past when we used him
Mortgage brokers are generally more expensive than the big 5
Ive always gotten a cheaper rate through my broker than any bank
Oh good to know!
Was also just some quick numbers for pre approval. Said he wasn't even going to pull my credit yet cause he knows I'm good there and pre approval only good for 30 days now. Didn't want to have to keep pulling it. Said might be better when I go to buy.
I just did a quick look at TD and CIBC and def advertised as higher (maybe a different story when you talk to them more). The theory is that they don't have to pay for his office space, benefits etc. he's essentially a contractor to all of them. Although he does get a cut
That means ur mortgage broker is really bad at his/her job
Yup
Interest rates will stay high until the next (stock) market crash. I can't tell you when that will be but when stocks fall 20% or more the central banks around the world will cut interest rates to near 0%.
Nah, I'm waiting for the principals to go down. Lots of mortgage renewals still need to get done. FOMO'ers in 2021 haven't had to feel the pain yet.
Thats a beautiful dream you have and yet the middle and upper classes are making more money then ever and received the lions share of pay rises in recent years, they will gobble that shit up fast especially with the current and next leaders being so keen on helping them as they always are for the last few decades.
Yeah, apparently, my salary makes me middle-class but still priced out. It will happen if interest rates stay at the current normal rates. Low rates and mass immigration are what pumped up the RE bubble. I don't think people will be keen to keep adding taking on debt with realistic interest rates. Would be nice if our government did something to disincentive owning multiple and/or vacant properties, though.
If rates cut the price will go up….
I think some people will learn the hard way that rate cuts have already happened for fixed rates. The overnight rate of the BoC will drop slowly, potentially even slower than the market anticipates, pushing up fixed rates.
People with fixed rates aren’t in hot water. It’s the variable rate holders who don’t want to lock in the top.
Low interest rates are the reason we have this unrealistic price bubble.
There are many reasons, that is just one.
And it's by far the biggest
The bubble is contracting...people who bought at the peak 2022 are not able to offload in any manner they are already counting 150k to 200k loss. Lately I have seen many properties are barely getting asking price. I think people are waiting for further price erosion not only interest rate decrease.
Where are you located? I wish my local market was like this. Agents are listing things that sold in 2022 for 100k more, and over 150k greater than the assessed value.
BC? That’s what it’s like here too. I want to metaphorically punch anyone involved with the listings for shitty entry level apartments that sold for $350k last year that are now asking $450k this year.
Yup BC, like the shittiest part of BC lol. I swear to god the local real estate agents are conspiring to keep listing prices high af. There’s only been a handful of houses sold in the last couple of months in my jurisdiction despite there being 150+ listings lmfao.
A physical punch is the cat's ass too. Give in to the dark side. 🐈
Back in 2012 I heard the bubble was going to burst or bursting... and every year since - and prices tripled or more since then.
Rates did fall progressively for decades, the bubble is very logical from that perspective.
With rates raising shelter and rental inflation it would now act in reverse, theoretically anyways, this may he why they are keen to borrow millions to buy mortgage bonds.
But buy bank stocks I guess, the federal government will pump housing and cheap debt even if it means tripling the deficit.
Exactly, the bubble will never pop and just keep inflating. Like every other bubble in history.
Property values in major markets have gone down since the peak. It is a matter of how much they will correct.
Calgary begs to differ
Halifax has entered the chat
Yea I know I live there.
I would love for rates to stay right here at 5 %. Works for me personally. Prices stay flat this way hopefully. Now I can save for a non moving goalpost
Exactly
Exactly. I’m weary if rates drop, prices get pushed further out of reach
Or a revolt. They will also take a revolt at this point
Given the comments by Jerome Powell south of the border , they are not cutting rates anytime soon, AND it actually sounds like they might even raise them. Their economy is booming.
Canada CANNOT cut rates if the USA raises them. It would tank our loonie and crash our economy.
If ours hold steady , and the USA stays put or raises them, it at least won’t tank the dollar, but the mortgages renewing in the next 24 months are going to be all at 4.5% plus , and it is going to stretch and tax the shit out of people , and we’re going to go into a recession.
Either way, because the USA is fucking on fire , we are screwed either way.
Buckle up, it’s going to be a bumpy 18 months
How many cuts? We went from 0.25 to 5 in 18 months but how long is it going to take to drop to say 2.5%. Could be years, better get used to “high” rates.
Babe wake up real estate infinite money glitch just got patched!
They better be prepared to wait a while then. High Interest rates aren't going anywhere fast, especially not this year.
And even IF they do drop, it’ll be miniscule drops. We can all agree 10 years of abnormally low rates did more damage to the housing market than good.
Praying for rate cutss
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really? ... and a minority 48% are waiting for rates to go up before buying??
More like waiting for prices to reflect reality AND interest rate cuts. Cut the rates all you want, it makes no difference when people treat housing like lottery tickets
If they think that rates will hit sub 2% again, they are living in a fantasy world
rate cuts were yesterday and tmrw but never today
Does anyone think actual home prices will drop back to pre-Covid numbers? Or will home prices continue to rise?
Do people understand what happens with rate cuts? Prices go UP and you will be competing with so many more people.
Rate cuts are not a good thing. The fact that you need a loan to buy a shelter, which costs anywhere 10x to 20x your net yearly income, is the problem.
Cheap money is not good for anything long-term, this is why we have absurd prices because anyone can show up at a bank with faked income documents and buy a home which they should not be buying in the first place.
I sure hope they don’t lower the interest rates. There would be basically zero chance I will ever get into the market unless they build hundreds of thousands of new units. The competition on entry level homes is already insane as it is.
With the 2-year fixed at 5.59%, 3-year at 4.84%, and 5-year at 4.79% (Roughly).
*Checks magic eight ball\*
I don't see a world where rates get back to 2-3% for some time.