5 Reasons Why Now Is a Great Time to Buy a Home in Canada
Homebuyers know that if they’re able to time their purchase correctly, they’ll be able to get a great deal on the home they’ve decided on. But the hard part is figuring out exactly when to make that purchase. This can be especially difficult if you’re planning to buy a home in Canada but aren’t familiar with the process.
If you’ve been holding off on buying your home, it’s time to start shopping! Several market factors are coming together to make now the perfect time to buy your new home in Canada. Let’s take a closer look at some of the reasons why.
Great Mortgage Interest Rates
The rate of your mortgage plays a major role in your monthly payment. If you want to keep those payments down – or if you want to be able to afford a more expensive home – you need the lowest rate possible. Part of that has to do with your credit score, but the rate you get is also tied to rates set by the government.
Current mortgage rates are quite low, so you’ll be able to get a good deal if you buy soon ahead of the signs that the government will increase those rates in mid-2022. Changes can come at any time, though, so it’s smart to lock in your rates while they are low.
If rates decrease by the time you finalize the mortgage, you’ll be able to get the lower rate, so you have nothing to lose by applying now. However, if you don’t have your rate locked in and the rates increase, you don’t have the security of the lower rate at the final time of approval.
Prices Are Down After A Spring Rush
Generally, the hottest time for the real estate market is the spring, going into summer. This is when a lot of people are trying to buy homes, and this demand drives up prices. As fall starts to creep up on us, though, there aren’t as many people out looking for homes. This means that there’s generally a slight dip in the prices, especially when it comes to resale homes that didn’t sell during the spring or summer.
Now, if you’re looking at brand-new homes, prices don’t always fluctuate as much. However, builders tend to offer special deals in the fall because they want to keep their sales momentum going. So while the home price itself might not change, you may be able to get discounts or freebies that will ultimately reduce the cost of the home.
The Market’s Heating Up…
While we’ve mentioned there’s a slight dip in the market for the fall of this year, it’s important to note we do expect home prices to increase within the next year.
The COVID-19 pandemic caused a lot of upheaval in the real estate market. In the initial stage of the pandemic, home sales dropped dramatically, as it became difficult to tour homes when the world was in lockdown. As things have started to open though, the market has become more active. People are looking for bigger homes, especially with working from home becoming a permanent possibility in many cases.
We expect the market to continue to heat up. You can also expect the cost of new homes to increase slightly as builders will need to make adjustments for the fluctuating costs of materials, especially lumber.
It’s Easier to Qualify For a Mortgage
Changes to regulations have also made it easier to qualify for a mortgage, which is a welcome relief after stricter regulations were introduced a few years ago. For instance, the required credit score has been dropped from 680 to 600. This opens up homeownership to more people.
Additionally, lenders have increased the gross debt service (GDS) and total debt service (TDS) ratio limits to 39% and 44% from 35% and 42% respectively. This means banks now allow you to have a mortgage that is up to 39% of your monthly income rather than 35% of it, as long as your total debt payments are 44% or less of your monthly income.
Home Values Are On The Rise
High home values might not seem great when you’re trying to buy a home, but they are a sign of a healthy housing market that will be good for you in the long term! With house prices on the rise. Now’s a great time to get in early so you can start building equity on your home, and if you decide you need to move in the future, you can be sure to make some good money when you sell your old home.
As you can see, the combination of various market conditions is making now a great time to buy. Stop in to speak with one of our Area Managers to see what Sterling can do for you.