Is it better to buy now or put off a purchase ?- Why Homebuyers Should Get Off the Sidelines
by Kenny on February 16, 2024
Looking to buy a home? Now might be as good a time as any this year. Many homebuyers are on the sidelines, waiting (understandably) for mortgage rates to fall.It’s a tough housing market and the factors that have been driving up home prices are likely to persist. . Home Buyers Shouldn’t Wait .
Even though the economy continues to run hotter than expected, forecasters still predict that the Bank of Canada will cut interest rates later this year, pressuring mortgage rates lower.
Millions of millennials are forming families and looking to buy homes. Unemployment remains low amid strong economic growth. Prices are high. Inventory is scarce. Construction of new homes in Canada has failed to keep up with demand. And homeowners are staying put, reducing the number of houses for sale. And mortgage rates are more than they were just two years ago.
For many Canadians, house hunting has rarely been this unpleasant. So is it better to buy now or put off a purchase in hopes of getting a better deal later?
Last year, existing-home sales, which make up most of the market, fell to the lowest level in nearly 30 years, while the median home price reached a record high. Analysts expect home prices to rise 3.2% this year. So you may see lower rates later this year but also some modest price appreciation of homes —meaning it could be a wash as far as your budget is concerned. “My thesis is that if you wait around, prices are probably going to be higher,” says Kenny Langburt from ReMax. “So I think it is a good time to buy.”
Depending on how far they fall, lower rates could bring some potential buyers and sellers off the sidelines. Although mortgage rates are currently higher than they have been in recent years, they aren’t abnormally high on a historical basis. Plus, if mortgage rates fall, home prices likely would rise, which means there would be little improvement in affordability—another reason not to wait.
You may be better off focusing on what you need and want in a home and what fits your budget today. If you purchase a home now and rates fall in a year or two, you can always refinance and reap the savings.
Kenny Langburt of ReMax advice to home buyers today is to evaluate the opportunity and crunch the numbers.“if you wait around, prices are probably going to be higher. Either way, mortgage rates aren’t getting back to 2.99% anytime soon.”