{"id":297759,"date":"2024-01-25T18:52:18","date_gmt":"2024-01-25T18:52:18","guid":{"rendered":"https:\/\/wahi.com\/ca\/en\/?p=297759"},"modified":"2024-01-28T20:34:04","modified_gmt":"2024-01-28T20:34:04","slug":"why-homebuyers-shouldnt-wait-for-lower-rates","status":"publish","type":"post","link":"https:\/\/wahi.com\/ca\/en\/learning-centre\/real-estate-101\/buy\/why-homebuyers-shouldnt-wait\/","title":{"rendered":"Why Homebuyers Shouldn\u2019t Wait for Lower Rates"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”0px||3px|||” global_colors_info=”{}”][et_pb_row _builder_version=”4.20.2″ _module_preset=”default” width=”95%” max_width=”100%” custom_margin=”||-24px||false|false” custom_margin_tablet=”||-24px||false|false” custom_margin_phone=”||-34px||false|false” custom_margin_last_edited=”on|phone” custom_padding=”55px||||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_breadcrumb _builder_version=”4.20.2″ _module_preset=”default” custom_margin_tablet=”” custom_margin_phone=”30px||-10px||false|false” custom_margin_last_edited=”on|phone” global_colors_info=”{}”][wahi_breadcrumb-link title=”Real Estate 101″ _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjcyMiJ9fQ==@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”Buy” _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjE2MzIifX0=@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IiIsImFmdGVyIjoiIn19@” _builder_version=”4.18.0″ _dynamic_attributes=”title” _module_preset=”default” module_text_color=”#686E6E” global_colors_info=”{}”][\/wahi_breadcrumb-link][\/wahi_breadcrumb][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.20.2″ _module_preset=”default” custom_padding=”16px||4px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _dynamic_attributes=”content” _module_preset=”default” header_font_size=”3.5rem” header_line_height=”4.5rem” header_font_size_tablet=”42px” header_font_size_phone=”1.5rem” header_font_size_last_edited=”on|phone” header_line_height_tablet=”3.5rem” header_line_height_phone=”2.1rem” header_line_height_last_edited=”on|desktop” global_colors_info=”{}”]@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IjxoMT4iLCJhZnRlciI6IjwvaDE+In19@[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”1px||1px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_socialsharing _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][\/wahi_socialsharing][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”15px||0px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|desktop” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” locked=”off” global_colors_info=”{}”]<\/p>\n

Holding out for lower rates is tempting, but doing so risks entering a possible seller\u2019s market \u2014 and a lot more bidding competition.<\/span><\/p>\n

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By Josh Sherman<\/a>\u00a0<\/span>| 3 minute read<\/p>\n

[\/et_pb_text][et_pb_post_title title=”off” author=”off” date_format=”M j” categories=”off” comments=”off” featured_image=”off” _builder_version=”4.18.0″ _module_preset=”default” custom_margin=”||26px|||” global_colors_info=”{}”][\/et_pb_post_title][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”0px||3px|||” locked=”off” global_colors_info=”{}”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” width_tablet=”” width_phone=”100%” width_last_edited=”on|desktop” custom_padding=”0px||9px|||” global_colors_info=”{}” width__hover_enabled=”off|desktop”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9mZWF0dXJlZF9pbWFnZSIsInNldHRpbmdzIjp7fX0=@” align=”center” force_fullwidth=”on” _builder_version=”4.18.0″ _dynamic_attributes=”src” _module_preset=”default” custom_margin=”1px||29px|||” border_radii=”on|32px|32px|32px|32px” border_radii_tablet=”on|32px|32px|32px|32px” border_radii_phone=”on|0px|0px|0px|0px” border_radii_last_edited=”on|desktop” global_colors_info=”{}”][\/et_pb_image][et_pb_text _builder_version=”4.20.2″ _module_preset=”default” text_font_size=”1.13rem” text_line_height=”1.75rem” custom_margin=”-18px||2px|||” custom_padding=”||7px||false|true” custom_padding_tablet=”||7px||false|true” custom_padding_phone=”|15px|7px|15px|false|true” custom_padding_last_edited=”on|phone” text_font_size_tablet=”1.13rem” text_font_size_phone=”0.9rem” text_font_size_last_edited=”on|phone” locked=”off” global_colors_info=”{}”]<\/p>\n

All eyes are on the Bank of Canada as prospective homebuyers and mortgage borrowers alike wait to see if policymakers will begin to reverse hikes to the overnight rate that have dramatically increased ownership costs in recent years.<\/span><\/p>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”1px||39px|||” locked=”off” global_colors_info=”{}”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”16px||16px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” min_height=”158.4px” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n

The Bank of Canada\u2019s decision on Jan. 24 to hold its policy rate at 5% likely left some prospective homebuyers cold.<\/span>
<\/span>
<\/span>In its <\/span>war on inflation<\/span><\/a>, the central bank has hiked the overnight rate \u2014 which influences the mortgage market and borrowing costs \u2014 10 times since March 2022 for a total of <\/span>450 basis points (4.5 percentage points). <\/span>While the BoC has now maintained the overnight rate four consecutive times, it seems like a rate cut can\u2019t come soon enough for <\/span>already-overstretched borrowers<\/span><\/a> and homebuyer hopefuls alike. <\/span>In fact, 48% of Canadians who are considering buying a home this year say waiting to see what happens with interest rates is a potential barrier to their property plans, according to <\/span>Wahi\u2019s 2024 Homebuyer Intentions Survey<\/span><\/a>.<\/span> However, experts warn,<\/span> if you can afford to finance your purchase today, you might not want to delay \u2014 even if lower rates appear to be on the horizon later this year, as <\/span>many market-watchers speculate<\/span><\/a>. <\/span>\u00a0<\/p>\n

<\/span><\/p>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” background_color=”#edf7f3″ custom_padding=”32px||32px||true|false” locked=”off” global_colors_info=”{}”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”||25px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _module_preset=”default” header_2_text_align=”center” header_2_text_color=”#38505b” header_2_font_size=”2.63rem” header_2_line_height=”3.75rem” max_width=”800px” module_alignment=”center” header_2_font_size_tablet=”32px” header_2_font_size_phone=”21px” header_2_font_size_last_edited=”on|phone” header_2_line_height_tablet=”3.75rem” header_2_line_height_phone=”32px” header_2_line_height_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n

“Mortgage rates around 6 to 7% have been common in Canadian financial history.”<\/strong><\/span><\/h2>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”32px||23px|||” locked=”off” global_colors_info=”{}”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”11px||14px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n

\u201cInterest rates went up 10 times in less than two years, and yet we haven\u2019t seen wide-scale housing market collapses,\u201d Moshe Lander, senior economics lecturer at Concordia University<\/a>, tells Wahi. \u201cIf all of that interest rate increase and aggression didn\u2019t take the air out of the housing market, what\u2019s going to happen when interest rates come down? The market\u2019s just going to take off.\u201d <\/span>Prospective buyers who hold out for the BoC to change course might secure a better mortgage rate in the short term, but they could also suddenly find themselves in a market that strongly favours sellers with the return of bidding wars, which have virtually disappeared from major markets<\/a> such as Ottawa and Toronto. Higher home prices could erase any savings from lower mortgage rates. \u201cYou\u2019re probably going to save a little bit of interest, but it\u2019s going to cost you a larger amount in principal,\u201d Lander explains. Should the BoC announce a rate cut, Jason Friesen, managing partner and mortgage agent at Outline Financial<\/a>, also suggests buying competition will be fierce. \u201cEveryone will come off the sidelines,\u201d he tells Wahi. One of Friesen\u2019s suggestions for today\u2019s homebuyers is to look at locking into a shorter-term rate of two or three years, rather than a five-year fixed-rate, for example. \u201cYou potentially lock into a shorter-term rate and purchase at today\u2019s prices so that you\u2019re taking advantage of a lower purchase price,\u201d he tells Wahi. If lending conditions are friendlier upon renewal, borrowers can ideally negotiate a lower rate later. \u201cYou marry the house and you date the rate,\u201d he adds. (Friesen emphasizes that \u201cit\u2019s not a one-size-fits-all approach, to be perfectly clear.\u201d)\u00a0<\/p>\n

<\/span><\/p>\n

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The Psychological Barrier of Past Rates\u00a0<\/b><\/h2>\n

<\/h3>\n

Today\u2019s homeowners are seeing the fastest and largest increase in interest rates in decades<\/a>, according to The Canada Mortgage and Housing Corporation (CMHC). However, contemporary rates are hardly extraordinary, historically speaking. \u201cMortgage rates around 6 to 7% have been common in Canadian financial history,\u201d writes Tania Bourassa-Ochoa, senior specialist of housing research at CMHC, in a recent report. Nonetheless, Freisen suggests that roughly a decade of rock-bottom rates have given some potential buyers unrealistic expectations about what regular borrowing conditions look like.<\/span><\/p>\n

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We put the real<\/em> back in real estate.<\/span><\/h2>\n

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Join Wahi today and find out how easy it is to get real estate<\/a> in Canada.<\/span><\/p>\n

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