Market Update for September 2022:
The real estate market is in an adjustment phase, as conditions shift from a seller’s market to a more balanced market, and, in some communities, into a buyer’s market.
The data indicates that many communities still have balanced markets which, in theory, is equally good for both buyers and sellers.
Regardless of market conditions - whether they favour sellers or buyers - home sales still happen regularly.
That’s because there are always people who need to buy or sell: to downsize, or get more space, or to relocate to something more suitable for their current needs.
As a homeowner wishing to sell, you may have to be a little more flexible in this market in terms of your asking price, preferred dates, etc., but in my experience, there is seldom a stalemate between buyers and sellers reaching agreement, when both parties are truly committed to the process, and are prepared to negotiate in good faith.
Both buyers and sellers are likely aware that interest rates went up again earlier this month. Experts are predicting a further increase before the end of the year, likely another half percentage point.
What does that mean in dollars and cents? Well, the last increase of .75 percent meant that on a $700,000 mortgage you would have had to pay an additional $234 every month for the term of the mortgage.
On a five-year fixed rate mortgage, that would mean more than $14,000 in additional interest, paid straight into the pockets of the lender. Ouch!
There is some speculation that interest rates may come down once inflation is under control, but by then housing prices will likely have stabilized and may well be on their way up again.
I think it’s a good time to buy… there’s lots of inventory to choose from, and prices are down. Qualifying for a mortgage will be more difficult with the interest hikes… the Stress Test means that you have to qualify at two points over the lending rate.
The best advice I can give you, is to talk to a mortgage broker and get pre-approved. That way you’ll know your budget and just how much it will cost you to borrow… and you’ll be able to lock in at today’s best rate and avoid the next interest rate increase, which is scheduled for October 26, 2022.
If you need a referral to a trusted mortgage broker, give me a call. And please let me know if there’s anything else I can do to assist you. I’d love to help!