For those renters, who are readying themselves to make the leap into Home Ownership, but felt that economic factors were holding them back, the market may be ripe, and time to take the plunge. A recent report from the British Columbia Real Estate Association (BCREA) hints that the balance of power has shifted to home buyers, with an increase in inventory propelling this shift.
Says Cameron Muir, Chief Economist with the BCREA: “Total active residential listings in the province have declined 18 per cent since June. However, the housing market remains tilted in favour of homebuyers. BC home sales have posted moderate gains since the summer months,” Mr. Muir continues, “Consumer demand was bolstered by double-dip in mortgage interest rates and the associated increase in purchasing power.”
Magic words for anyone worried about taking on a mortgage payment, the normalization of both short-term and long-term interest rates will be deferred. So then, most BC households with variable rate mortgages will pay lower amounts than would have been anticipated at the beginning of the year.
They are ready to share the wealth too. New homebuyers or homeowners whose mortgages are coming up for renewal will be offered a second chance at securing rates at levels which have not been seen since the recessionary lows, which would assist new homebuyers ( and current ones too for that matter) in budgetary planning.
The BCREA mortgage rate forecast suggests that they current low-rate situation will extend into 2011, when there is thought that there will be a new round of tightening by the Bank of Canada. When the economy returns a little more to normal, interest rates will climb again at a controlled pace.
The forecast for a one-year fixed rate at the end of 2010 is around 3.20 % and will likely reach 4.05 % t by the end of 2011. The five-year fixed mortgage rate is forecasted to end 2010 at 5.35 % and to continue up to 6.10 % by the end of 2011.
So, with these low interest rates, that are expected to rise soon, and the good selection from a large inventory, condition are currently pretty favourable to make the move to home ownership.