The loonie is once-again flirting with U.S. parity, Calgary’s average home price is up nearly 12% over this time last year, and inflation is on the rise. By now you’re probably aware of just how much your lender has raised their mortgage rate(s) and you’re deciding, ‘to lock-in, or not to lock-in?”
Well take a peek at this recent CTV News article for what you can expect in the near future. It’s been interesting keeping an eye on what’s happening in the Calgary market. A lot of product in the range of, say, between $275,000 – $500,000 has changed hands. Buyers are motivated by current conditions and the threat of mortgage rates, rules and guidelines changing. The market here is relatively busy (read: steady) as spring has sprung and buyers & sellers shake off the cobwebs, and wake-up from the hibernation brought on by the winter doldrums.
Nothing shocking you say? Well – yes and no. Yes, because spring is traditionally a busier time in virtually every market across the country. And no because depending on where you’re buying or selling, seeing double-digit increases (when it comes to average house prices) is almost surreal, considering what Canadians and North Americans just went through during the latter part of 2008 & nearly all of 2009.
Taking this article a bit further, already the talk is centering in more, now, on Canadians that have stretched themselves so thin, by maxing-out their mortgage amounts, that if these rates do keep climbing (based on federal and individual lending tactics) those who are a) not locked in at a low rate b) riding the variable ‘wave’ c) mortgaged to the max, may suddenly find themselves in hot water.
Again, the signs are there. Where exactly will we be in 6 months? 1 year? Time will tell. But…certainly expect inflation, coupled with government changes to the mortgage market and interest rates to greatly influence what you can actually afford. The days of record-low interest rates are now history. And as we progress, I think many of us will be regaling about the days when interest rates were oh, so, low…
What do you think? Send me your two-cents.
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By Alyson Thiessen, April 18, 2010 @ 2:51 pm
Inflation is inevitable. It’s been in the closet far too long…in fact, the Bank of Canada has been afraid of Inflation for 20 years….why? Certainly the late 70′s and 80′s were uncomfortable but everyone got through….maybe it is time to let the reigns out a tad….bow to a more keynesian approach. Just my two cents.
By J. Shilmar, June 6, 2010 @ 7:02 pm
I think they used the “threat” of inflation in order to justify raising rates this week. I think the market can easily bear a .25 increase. What will be more interesting is the minutes from the July meeting. This will give an indication of what way they may move in the future.
For buyers mortgage rates are still affordable and this increase may scare some into getting into the market. They may fear higher rates in the future.
I think though that we are definitely going to see a big turnaround in power and the real estate market is definitely heading into a buyer’s market.