A word from Melissa Cescon:
I have noticed two interesting trends in the (local) real estate market of late. The first trend is that the housing inventory overall is low, relative to the demand. In other words, there are buyers who are ready to purchase, but with a slim selection, they are either waiting for the next new listing, paying close to asking price, or paying over asking as is still the case with the surprising number of competitive offers.
The second trend is related to the mortgage rates. The five and ten year fixed mortgage rates have climbed over 80 points since July, meaning that the once impressive 2.89% rate is now a distant memory. The current norm is 3.69% and this could affect your mortgage payments considerably – maybe enough to regrettably delay a purchase on a home you love! I’m a solutions provider, so I asked myself and my industry colleagues the question ..... how CAN a buyer purchase in these times with a low inventory and rising interest rates? Well, something surprising has come out of this fixed interest rate climb. The 5-year Variable mortgage has come back into vogue. If you are a qualified buyer and working with an experienced mortgage broker, you may be able to secure a variable mortgage at the prime bank rate minus .50. That’s a rate of 2.50% as opposed to 3.69%, and the advantage is that you can lock in at any time.
Need more encouragement? In October, the Economics Department of a major Canadian bank predicted that the trend-setting Bank of Canada Rate will not go up until the mid of 2016. That’s a nice ride for 2 more years and if the current 5-year fixed rate drops back into the low 3% range, you have the option of locking in at that time. These are all positives, and definitely worth considering as you weigh your buying decision. I can help clarify your questions about this market, so drop me a line or call me!