While it may have been the sixth consecutive month-over-month decline for Canadian housing activity, August’s home sales only dipped 1% from July—the smallest decrease seen during this slowdown period. “Along with a stabilization of demand/supply conditions in many markets, [it] could be an early sign that this year’s sharp adjustment in housing markets across Canada […]
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Deciding on the qualifying interest rate In the past, I argued that the qualifying rate should be the higher of 3.75% or the actual contract rate. Given what’s happening now, was I wrong? Actually, I think what’s happening now vindicates my position. The argument for the 3.75% test rate had two major parts: The policy […]
Read more "A deep-dive into mortgage stress tests"
A report by TD Bank suggests the average price of a home in Canada could fall 20 to 25 per cent from its peak seen earlier this year to the first quarter of 2023. The report also estimates the number of home sales will fall 35 per cent over the same time period. TD economist […]
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Vancouver, BC – August 11, 2022. The British Columbia Real Estate Association (BCREA) reports that a total of 5,572 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in July 2022, a decrease of 42.4 per cent from July 2021. The average MLS® residential price in BC was $923,449, a 3.6 per cent increase from […]
Read more "BC Home Sales Continue to Slow"
Over the last three to four months, Vancouver’s real estate market has experienced a dramatic cooldown. Of course, this market correction comes after a well-documented and record-breaking two-and-a-half-year run that saw home sales and price growth across the Lower Mainland reach unprecedented heights between March 2020 and the first quarter of 2022. According to Kevin […]
Read more "Vancouver’s Housing Market Embraces Change, Prepares for Fall Rebound"
You’ve probably seen the headlines: the Bank of Canada has raised their key interest rate. Yet again. And this hike isn’t any less forgiving than the last one. In another unprecedented move (anyone sick of that word yet?) the rate increased by 0.50%, double the normal increase of 0.25%. Yes, it’s a big jump that’s […]
Read more "Rates Are On the Up and Up… But For How Much Longer?"
From all accounts, floating-rate mortgages continue to outsell 5-year fixed terms. It doesn’t hurt that variables are priced at an average of 184 basis points below 5-year fixed rates. Come June 22, however, more people will be questioning their faith in variables. That’s when we’ll receive May inflation data, and it should be enough to […]
Read more "Fixed rate vs. Variable: Stop guessing at the mortgage game"
As of June 2022, we are currently seeing unnatural discrepancies in the size of mortgage loans borrowers will qualify for, and it’s all because of a rift in the stress test continuim. You see, most 5-year fixed mortgage rates are already over 5%, making their stress test a full 2% higher at 7% or more. Concurrently, […]
Read more "How the mortgage stress test is impacting qualification amounts."
Possibilities and challenges have emerged from the cooldown, says mortgage executive. The housing and mortgage markets may have cooled off substantially in recent weeks – but that’s bringing opportunity for buyers including greater choice and less competition from rival bidders, according to a prominent industry figure. Shubha Dasgupta (pictured), president and CEO of the Pineapple […]
Read more "Housing market slowdown: How have things changed for buyers?"
For the past two years, appraisal valuations have rarely fallen short. Instead, we routinely saw appraisals coming back at the purchase price—and often higher—due to the national pandemic-induced frenzy for real estate. Since February of this year, the music has stopped playing in many markets across the nation, and the real estate marketplace is balancing […]
Read more "What happens when appraisal values come up short?"