3 Trends We Expect in the Canadian Housing Market

The Canadian housing market is becoming promising for potential homebuyers this year. With the economy showing signs of stabilization, there's growing speculation around the possibility of declining interest rates. This could create a more accessible market, especially for first-time buyers.

A Potential Market Correction on the Horizon

Canadians have seen relentless interest rate increases over the last two years to curb inflation, which has been straining for new buyers and existing homeowners. It has dampened the dream of homeownership for some, creating delays until rates adjust to more reasonable levels. However, the tide appears to be turning. With central banks holding rates steady, things are becoming more optimistic. This potential easing of rates offers some reprieve for current homeowners and greater accessibility for first-time buyers looking to enter the market.

With central banks holding rates steady, things are becoming more optimistic.

Variable Rate Mortgages May Be an Option Again

Given the discussion around the anticipated decline of interest rates, there has been conversation on variable-rate mortgages as a viable option for homebuyers. Before the pandemic of 2020, we lived in a market of record low interest rates. Variable-rate mortgages were a favoured option because they offered unmatched savings compared to fixed rates. However, as interest rates climbed post-2020, the predictability of fixed-rate mortgages became the first pick for many. As we navigate a potential decrease in rates, variable-rate mortgage options are emerging again as an attractive alternative. Depending on your ability to navigate the ebb and flow of rate increases, a variable-rate mortgage might not only be feasible but also result in significant savings over the long term.

Home Prices Expected to Decrease

Since its peak in March 2022, there has been a noticeable decline in home prices - showing signs of a market that’s becoming increasingly buyer-friendly. Steady interest rates coupled with the decrease in home prices signal a promising opportunity for first-time buyers to become homeowners. All of this underscores a more accessible market for first-time buyers and current homeowners alike, a moment many have been waiting for.

While there are no certainties, this evolving scenario offers a glimmer of hope for first-time buyers and provides a much-needed break for those impacted by the upswing in rates over the last few years. Should these developments continue, the stage is set for a year that could mark a turning point for many in their quest for homeownership in Canada.