In the June 8 issue of Canadian Mortgage Trends (Click here for the full issue), Steve Huebel writes, "Over two-thirds (68%) of Canadians say they plan to wait until mortgage rates drop before they decide to purchase a house. That percentage is even higher among younger demographics, according to the results of BMO’s Real Financial Progress Index.
For prospective Gen Z homebuyers (ages 18 to 24), 71% say they’ll defer their home purchase until rates are lower, while 69% of younger Millennials (ages 25 to 34) say the same.
“Amid this challenging and changing market, homebuyers are keeping a keen eye on interest rates,” said Hassan Pirnia, Head, Personal Lending and Home Financing Products, BMO.
From my perspective, I don't think that the recent 0.25% raise is all doom and gloom, and here's why. While it is true that the cost of borrowing money has gone up again, this will put downward pressure on Real Estate Prices.
When you combine this with Steve Huebel's comments, I believe that Buyers who are "Market Ready" may be in a great position to purchase, as there will be fewer of them active in the market at a time when the number of new listings coming to the market begins to increase, resulting in less competition which will also put downward pressure on Real Estate Values.
What does "Market Ready to Buy" mean? It means that those buyers who have 20% available for their downpayment and have their debt loads in line will be able to offer with confidence but be able to close on the property of their dreams