Trying to time the housing market after the rate cut? What experts advise

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Bank Of Canada,Canada Housing Market,Interest Rate

Sidelined homebuyers might wonder if now is the right time to get back into the housing market after the Bank of Canada's interest rate cut. Here's what experts say to consider.

Housing starts climbed 10 per cent in May compared with April, according to the Canada Mortgage and Housing Corporation while Canadian Real Estate Association data shows it was "another sleepy month" for homebuyers. Anne Gaviola has these stories and more in Business Matters for Monday May 17, 2024.cut of the cycle, spurring speculation from all corners of the housing market about how buyers and sellers will react.

Morrison says Canadians should weigh both the mortgage rate they can qualify for and their purchase price, but not necessarily equally. Homebuyers only get one chance to settle the purchase price of their property, she notes, but will renew their mortgage rate multiple times over the lifetime of the loan.

That means qualifying at rates of at least eight per cent for variable-rate mortgages, or closer to seven per cent in the case of some fixed rates. When fixed rate mortgages have dipped enough for Canadians to qualify for the size of mortgage they need and a monthly carrying cost they can handle, Jarvis says it will only be a matter of time before competition heats up in the Canadian housing market.Ipsos polling from earlier in the month showed that six per cent of non-owners surveyed said interest rates would have to drop by less than one percentage point for them to consider buying a property.

 

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