There are a lot of homebuyers, especially first-time homebuyers, waiting on the sidelines trying to gauge the market on when is the best time to buy.
My answer?
There isn’t a perfect time to buy. It is what is right for your situation now.
That said, there are a few things to consider as you get ready to buy.
Rates in the 4-6% range is the normal range of what mortgage rates should be and the market was headed into the 4% range in 2019.
Rates did peak and have come down. However, no crazy rate drops are expected. Rates increased significantly last year and peaked in the fall of 2023, even when inflation was significantly lower.
There is a low home inventory in Alberta.
As rates go down, buyers qualify for more and home values increase because more buyers can afford higher home values.
Home values in the Edmonton region are low compared to other regions.
Alberta is seeing an increase in workers moving into Alberta from other provinces. Alberta has recently announced a $5,000 tax credit to those who move to Alberta in a skilled position.
More people moving into the province means lower inventory and higher values.
Multiple offers on properties have become more common if the property is priced right and in a desirable area.
Rent vacancies are low and the cost of rent has increased significantly. One reason why rent has increased is because the landlord is faced with higher mortgage costs from higher rates.
Rates…What the Numbers Actually Look Like
Here are some numbers for you.
On a $300,000 mortgage at 5.04% (25 year amortization) the payment is $1,760/month.
On a $300,000 mortgage at 4.39% (25 year amortization) the payment is $1,642/month.
There is a $118/month difference.
However, buying power increases by approximately $24,000 at the lower rate (you can buy more house for the same mortgage amount).
This could cause more buyer demand at that price point. In a low inventory-higher rate environment, you could purchase at a higher value with a lower rate.
Looking to Buy?
If you are looking to buy, here is what I recommend.
Talk to a mortgage broker and run the numbers to see what works.
Have your documents ready!
Plan and be prepared for when the right property comes up. In this market, the right properties go fast.
I’d be happy to help run those numbers for you, so give me a call or send me an email and let’s figure out if now is your right time to buy.
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