5 Top housing market questions you need answers to right now

The market has shifted, and that’s a good thing.

Demand and sales are headed back to pre-pandemic levels, which were some of the strongest in recent history.  The shift has caused a great deal of confusion and uncertainty. 

Here are the top 5 housing market questions you need answers to right now to better navigate the shifting market

Is the housing market going to crash

Headlines right now scare consumers that the “boom is over” and the economy is slowing down. To really understand what’s happening with real estate today, it’s important to lean on the experts for reliable information. Experts say the housing market is not heading for a crash. The Bank of Canada has deliberately raised interest rates. In response, home prices are falling as economists had expected, with steady declines in most areas and faster pullbacks in the markets that had the biggest run-ups during the Covid-19 pandemic’s ultra-low interest rate environment. That should hearten the Bank of Canada as it continues its tightening campaign, showing that rate increases so far are cooling the market without prompting the forced selling that could provoke a crisis. according to Robert Kavcic, a senior economist at Bank of Montreal.

If we were to describe the market shift, if seems to be normalizing yet still a seller’s market

What’s happening with mortgage rates, now and in the future?

Rising mortgage rates are no doubt one of the biggest factors impacting the housing market right now. But it’s important to remember that the low rates of the last few years were an anomaly. 

As inflation rises and mortgage rates climb, many may see their purchasing power shrink and their dream of homeownership fade.

But now experts say mortgage rates should stabilize and that makes home buyers more confident about their decision to buy a home.

Buying a home can be a hedge against inflation primarily because: As inflation rises, so should the value of your home. The loan-to-value (LTV) ratio of your mortgage will decrease as your home's value increases over time. In other words, your fixed-rate mortgage payments stay unchanged while your home's equity rises.

A home is a tangible asset that typically holds or grows in value. In most decades, home prices have outperformed inflation. If you’re thinking about buying a home today, know that history shows homeownership is a good hedge against inflation.

Don’t forget to check out our blog post 8 Strategies to Secure a Lower Mortgage Rate

If the economy slows further, what does that mean for real estate?

If the economy slows down, Central banks cut interest rates in order to reinvigorate economic activity and growth. The goal is to reduce the cost of borrowing so that people and companies are more willing to invest and spend.

But as the economy slows down, history tells us this would likely mean lower mortgage rates for those looking to refinance or buy a home. 

While no one really knows exactly what the future holds, one thing will forever remain the same: people will always need a place to call home.

And while history doesn’t always repeat itself, we can learn from it. While an economic slowdown needs to happen to help taper inflation, it hasn’t always been a bad thing for the housing market. Typically, it has meant that the cost to finance a home has gone down, and that’s a good thing.

Call us so we can discuss what this means for your homeownership goals.

What will happen in the second half of this year?

Yes, we are seeing a slowdown. However, we are really just heading back toward the market pace we saw pre-pandemic, and those were still great years for real estate.

Focus on the big picture, and that’s this: the housing market is still very strong, and previous projections are already outperforming what industry experts forecasted earlier this year.

In case you missed it, check out our blog Expert Housing Market Forecasts for the Second Half of the Year

Wondering if you should buy a home today? Experts say home prices will continue to appreciate in the coming years, but at a slower rate.  Read more about this in our blog: The Shift. Appreciation, Depreciation or Deceleration?

If you buy now, you’ll best those future increases. And once you do own the home, any price appreciation that occurs will grow your home’s value and your net worth.

Call us today if you’re ready to invest in homeownership. 

Should I wait to buy a home?

This is probably one of the biggest questions we are being asked right now.

Even though purchasing a home today may not be as easy as it was a couple of years ago, the latest data shows that inventory levels are rising, which means more moderate price appreciation and more options for buyers.  

Read the blog Should You Buy A Home With Inflation This High?

Hopefully the rate of appreciation should moderate over the next few years as the market shifts away from the unsustainable pace it saw during the pandemic.  

Wondering if you should buy a home today? Experts say home prices will continue to appreciate in the coming years.

If you buy now, you’ll benefit from those future increases. And once you do own the home, any price appreciation that occurs will grow your home’s value and your net worth.

Call us today if you’re ready to invest in homeownership.