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IS IT A GOOD TIME FOR (FIRST-TIME) HOME BUYERS
This is a question I get regularly from my clients. My client-specific guidance always takes into account their unique situations. So I encourage you to reach out or to talk to a trusted real estate professional to discuss your specific circumstances and opportunities.
However, today’s real estate market provides some general opportunities where my short answer to this question is “Yes – it is a uniquely good time to buy”. Read on to find out why.
MORTGAGE AMORTIZATION EXTENSION
Previously I wrote about the mortgage amortization extension to 30 years (up from 25). You can see that post here. The basics: Effective December 15th, the maximum amortization period is extended to 30 years for newly constructed homes and for first-time home buyers. This change has two potential impacts:
- By extending the amortization period, the income required to qualify for a home purchase decreases. This means more clients can meet the necessary mortgage criteria.
- Clients will experience a decrease in their monthly payments, making homeownership more financially manageable. For instance, on a $600,000 purchase, the monthly payment could drop by approximately $250, providing greater flexibility in budgeting.
MORTGAGE INSURANCE CAP INCREASE
Recently, the Federal government has announced, effective December 15th, the mortgage insurance cap is increased from $1M to $1.5M. Without getting into the details, by increasing the cap, more buyers are able to purchase a home with a lower down payment and can still qualify for mortgage insurance.
An example: The minimum down payment for a $1M home goes from $200,000 on December 14th or earlier to $75,000 on December 15th. This change allows more people to enter the market with a smaller initial investment. This is only part of the cost of home ownership but it is a significant change that many will find beneficial.
BoC Interest Rates
INTEREST RATES
Add the above changes with the current lower(ing) interest rate environment and you can really start to see the picture forming. As of this writing the Bank of Canada overnight rate is 3.75%, down from 5% just 3 months ago. The next rate decision is December 11th and while it is too early to indicate what they will do, it is unlikely to result in an increase in the rate.
CURRENT INVENTORY
Need more? Currently the lower pace of sales in the Fraser Valley has increased the available housing inventory to the highest levels since 2019 (7890 available units in September 2024 vs 7672 units in June 2019). This means there are more choices available for buyers and an opportunity for buyers (in many cases) to take their time to find the right property.
SO IS IT A GOOD TIME TO BUY?
So what am I saying? All of the above combines in a way as to create favourable conditions for buyers. Well-priced homes in desirable locations are still selling quickly. But if there was ever a time where I would say “now is a good time to buy”, this is it.
If you are looking to discuss your specific situation and how these (or other) changes affect you, reach out.
As a full-time REALTOR® I understand the importance of having a professional looking out for your interests. Send me an email or my calendar is here if wanting to book a no obligation conversation. Happy House Hunting.
1 – The Fraser Valley Real Estate Board consists of the communities of Abbotsford, Langley, Mission, North Delta, Surrey and White Rock
