ABTeam September 2024 Blog
Thursday Sep 12th, 2024
WELCOME TO THE ABTEAM SEPTEMBER BLOG!
In real estate, September traditionally heralds the return to a more active market. Once the kids are settled back into the school routine, those who are planning a move tend to put their plans in motion. Traditionally, it’s a much more condensed season than the spring market, but often, more balanced to transact within. This year, we expect things to be quite interesting, with the Bank of Canada expected to issue more rate cuts at both their September and October meetings. While the first rate cuts of 2024 did little to move buyers off the fence – indeed, it seemed to fix them more persistently to it -- we believe these next two will significantly shift the market, spurring on some strong buyer confidence and increased ability for many buyers to get into home ownership. Activity, we believe, is about to ramp up dramatically over the next six to twelve months and the existing, overly saturated resale market will return, once again, to one of depleted inventory stores in the process. Why? Because the Canadian-wide housing shortage never really goes away, despite the government’s best and worst attempts to make it appear so.
How can we predict all this? Well, we follow the global financial and geopolitical arenas extremely closely. We recognize how completely interwoven it all is and we study it daily. Last year at this time, we predicted that the BOC would begin to cut rates in 2024, possibly as early as Q2, and we were right. We predicted that the fall market of 2023 would be very soft, with continued price corrections, making it a great time to buy. Once again, we were right.
BANK OF CANADA RECENT RATE CUTS:
The September 4th Bank of Canada announcement to cut the benchmark overnight rate to 4.25% helped further bolster consumer confidence. Economists and industry professionals anticipate that rates will drop even more as the year progresses. The next announcement is scheduled for October 23.
Recently, fixed mortgage rates have been dropping, tied to the 5-year Canada Bond Yield rate. If you are shopping for a home, or have a mortgage renewal coming up, keep a close eye on rate offerings, and check with your mortgage broker regularly, as they have been changing recently.
HOMES ARE BECOMING MORE AFFORDABLE!
Over the past few months, we've witnessed a rare and advantageous trend in the housing market: consecutive monthly decreases in interest rates. In June, July, and September, interest rates have each been cut by 0.25%. This cumulative reduction of 0.75% presents a unique and timely opportunity for prospective home buyers.
So, what does this mean in real terms
For example a mortgage of $600,000 averaged over 25 years, the impact is more than just noteworthy:
- Original Interest Rate (5.00%): The monthly mortgage payment was approximately $3,507.54.
- Reduced Interest Rate (4.25%): Now, the monthly payment has dropped to about $3,250.43.
This decrease translates into a monthly savings of $257.11!
[A substantial reduction that enhances affordability and could potentially allow you to consider properties that were previously just beyond your budget.]
This trend towards lower interest rates not only makes it more economical to borrow but also increases your purchasing power, allowing you to get more home for your money. It's a fantastic time to explore the market, especially if you've been on the fence about buying.
If you're ready to take advantage of these favourable conditions, or if you simply want to discuss how this might impact your specific situation. Our goal is to help you navigate this market to find the perfect home at the best possible terms.
Please don't hesitate to reach out to us, we would love to hear from you .
Also, don't forget, lower rates mean better conditions for refinancing too, if you're considering improving your current home loan terms.
CURRENT MARKET UPDATE:
SEPTEMBER DATES TO REMEMBER:
21ST - International Day of Peace
22ND - Autumn Equinox
23RD - National Daughter’s Day
25TH - National Son’s Day
28TH - National Coffee Day
29TH - National Day for Truth &
30TH - Reconciliation
As always, we are sincerely grateful for the opportunity to serve your real estate needs, and those of your family and friends, neighbours and co-workers. It is a constant thrill to receive personal recommendations from our clients, and we have been so fortunate to be able to build our business on our name and reputation – and it’s all thanks to you!
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