Mortgage Trends to Watch for in 2023

It’s looking like we’re going to be seeing similar real estate trends in 2023 compared to last year.

Following a year defined by market highs and lows, experts are forecasting a gradual return to a more balanced market towards the end of 2023. However, with inflation remaining more or less unchanged at the tail-end of 2022, last year’s trend of diminished purchasing power seems likely to persist.

As for what that means for mortgage lending, Shaun Cathcart, Senior Economist at the Canadian Real Estate Association (CREA), predicts primary-based mortgage payments will continue to rise dramatically until the Bank of Canada (BoC) reaches its terminal rate. 

Variable rate mortgages will hit their ‘trigger rate’

“The ‘terminal rate’ as it’s…

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Bank of Canada Raises Target for Overnight Lending Rate

Bank of Canada Raises Target for Overnight Lending Rate Again, Changes Language on Future Rate Hikes

The Bank of Canada hiked its target for the overnight lending rate by 50 basis points to 4.25% while continuing its policy of quantitative tightening but stated that looking ahead it would need to consider whether the policy rate should rise further—a much more neutral stance than previous announcements.

After the announcement, financial markets were pricing in the potential for one more interest rate hike by the third quarter of 2023.

The Bank noted economic growth was stronger than expected in the third quarter of 2022 and continued to operate in excess demand. The Bank expects growth to stall through the end of the year and into the…

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Canadian Home Sales See Surprising Rise?

On Tuesday, November 15, the Canadian Real Estate Association (CREA) released its national housing statistics for the month of October. Below, CREA’s Senior Economist Shaun Cathcart provides an update on the current state of housing markets in Canada and explains what the data means for members:

In a surprise to many, home sales recorded over Canadian MLS® Systems edged up 1.3% between September and October 2022.

To close observers, this should not come as a surprise given that month-to-month sales declines have been becoming increasingly smaller since May. For some, the change from negative to positive results is a big deal, if only psychologically.

A 1.3% increase may not seem like much since our natural inclination is to compare it to…

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How Do You Pay Off Your Mortgage Faster?

Buying a home is a big investment and a huge commitment, but most homeowners will attest that the pay-off is worth the pains and strains of making those regular mortgage payments. Most people focus on their mortgage interest rate as a way of saving money (or at least, ensuring more of it goes toward your principal), but there are other ways to decrease the amount paid in interest. One way is to pay your mortgage off faster. More on that below, but let’s start with a basic mortgage 101.

What is a mortgage?

In order to buy a home in Canada, you’ll need a down payment of at least five per cent of the home’s purchase price (but it can be more). These funds are typically saved over time and can be boosted with the help of…

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5.8M Homes Needed by 2030 To Tackle Affordability Crisis

The Canadian real estate market is experiencing a correction period. While many industry observers are stopping short of calling this downturn a crash, it is clear that the once-sizzling housing sector is being doused by rising interest rates and broader uncertainty surrounding market conditions. So, are we still experiencing an affordability crisis?

In September, the national average home price tumbled 3.9 per cent from the same time a year ago to $637,673, according to the Canadian Real Estate Association (CREA). Even when Toronto and Vancouver – two of the hottest housing markets in Canada – are eliminated from the equation, the typical residential property in the country sold for more than $500,000. While this is…

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A Spotlight on Newfoundland Real Estate

Since the beginning of the coronavirus pandemic, the Newfoundland and Labrador real estate market has seen the best of times and the most modest of times. In other words, the Atlantic Canada housing market has enjoyed a pandemic boom, but prices have not mirrored what was taking place in British Columbia or Ontario.

Despite climbing interest rates that have ostensibly impacted many major urban centres, small towns and rural communities across the country, Newfoundland and Labrador have held steady. The province and its municipalities have not fallen off a cliff. Instead, despite waning demand, prices have remained intact and affordable.

So, what occurred in the eastern province’s real estate market? Let’s explore the…

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Locking In a Variable Rate Mortgage

When mortgage interest rates were on a downward trend in the early days of the coronavirus pandemic, a variable mortgage rate made sense. With no signs of tightening on the horizon, the housing market boomed at extraordinary levels never seen before.

Now that interest rates are rising as the central bank attempts to rein in out-of-control price inflation, the discussion is how high mortgage rates will go. It is a crucial conversation, since rising rates will increase your monthly mortgage payments. While it’s challenging to forecast just how high mortgage rates will climb, Canada Mortgage and Housing Corporation (CMHC) thinks they will start to stabilize in 2024, which is when some market analysts expect the Canadian real estate market to…

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National Home Sales Forecast to Edge Back Further

With interest rates on the rise, home sales have continued to cool. In some parts of the country, home prices have fallen from their peaks reached earlier this year, are flat in some regions, and are still climbing in others. The issue of not enough homes for sale has not gone away.

Some 532,545 properties are forecast to trade hands via Canadian MLS® Systems in 2022, a decline of 20% from the 2021 annual record. The downward revision from CREA’s June forecast was mostly the result of a downward revision to sales activity in Ontario, along with smaller revisions in British Columbia, Alberta and Quebec.

The national average home price is forecast to rise by 4.7% on an annual basis to $720,255 in 2022. That said, much of that increase reflects how…

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Are Higher Fixed Mortgage Rates Here To Stay?

One question many Canadians are asking is are higher fixed mortgage rates here to stay? At the September policy meeting, the Bank of Canada (BoC) raised interest rates by 75 basis points, bringing the benchmark rate to 3.25 per cent, maintaining its hawkish approach to monetary policy. The central bank signalled that it would be prepared to keep pulling the trigger on rate hikes until there is sufficient evidence the consumer price index (CPI) is showing signs of coming down.

Although the Canadian annual inflation rate has eased from its 30-year high of 8.1 per cent in August, officials conceded that this was driven mainly by gasoline prices. The national economy endured “a further broadening of price pressures, particularly…

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Canadian Housing Market Outlook: Fall 2022

RE/MAX Canada Network expects Canadian housing market prices to decrease 2.2 per cent this fall

• RE/MAX brokers and agents anticipate prices in the Canadian housing market to ease by 2.2 per cent this fall, due to high inflation, rising interest rates and economic uncertainty
• Rising interest rates have prompted 44 per cent of Canadians to temporarily shelf their home-buying aspirations, while 34 per cent say they won’t hold on purchasing a home for the foreseeable future
• Recession worries have impelled 41 per cent of Canadians to wait to purchase/sell their home in fall 2022

Toronto, ON and Kelowna, BC, September 28, 2022 – RE/MAX brokers and agents are anticipating the national average residential sale price in the Canadian housing…

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