Waiting to Buy a Home? 5 Reasons to Look Now.

Hello, potential homebuyers! Today's post is tailored especially for those of you contemplating a home purchase in the vibrant city of Toronto. If you are caught in the waiting game, hesitant about when to make your move in the real estate market, this is for you. Recent trends might have you flustered and questioning the right time to lay down roots and investing in your new home. However, I encourage you to take a deep breath and assess the actual parameters of the Canadian market conditions. By considering the information shared by industry leaders, such as the National Association of Realtors and esteemed chief economists, I will guide you in understanding why now might be the perfect time to act.

Let's dive into the five key reasons that underscore why now could be a great time to make that critical investment in your new home.

1. Interest Rates Have Peaked

2024 data indicates that we've likely seen the highest level of interest rates. The federal reserve, which primarily controls these rates, has suggested that interest rates have possibly peaked for the time being. While we could see a slight increase in the future, overall, the trend indicates that over the long run, interest rates are more likely to plateau or even decrease slightly ("a little bit" as they say). This, along with the anticipation of a surge in buyer demand, could mean higher mortgage payments in the future, owing to higher home prices and interest rates.

Getting into the Weeds: Interest rates likely peaked in 2023 due to various technical factors. Alterations in the federal reserve's monetary policy geared towards normalization, coupled with stabilized economic growth and manageable inflation levels, discouraged further rate hikes, indicating a peak. Furthermore, the synchronized stablisation in global financial markets contributed to this peak. Lastly, consistent employment rates bolstered consumer confidence, prompting long-term commitments like mortgages, which increased borrowing demand and pushed rates to peak levels. Collectively, these factors resulted in the peak of interest rates, shaping the trajectory for future trends.

Don't overlook the direct impact of interest rates on your monthly mortgage payment. A high interest rate compounds over the life of the loan, resulting in increased amortization costs. Lower mortgage rates mean a lower monthly payment- an important aspect for individuals who have a tight monthly budget.

2. Buyer Demand is on the Rise

Numerous reports from the National Association of Realtors indicate that there’s potentially going to be a surge in buyer demand in the foreseeable future. After a period of suppressed activity in recent years, namely during the great recession, buyer demand is now trending upward in parts of the country, especially in burgeoning markets like Toronto.

There is a collective sentiment that the following years are only going to see an increase, which means increased competition. Consequently, less competition today means you could negotiate better pricing structures, get a better deal, and achieve more favourable terms in your home loan.

3. Stability in Prices

Current housing market trends suggest stability in prices. High prices are a relative thing – next year, today's prices will likely be the "good old days" as annual increases are expected in the Toronto real estate market. The chief economist at the National Association of Realtors revealed that median home prices have stabilized in most Canadian markets. While there may be short-term fluctuations due to market conditions, the long-term trajectory shows consistent growth in home values. A home remains a long-term investment, appreciating over time and thus contributing to the growth of your net worth.

Canada, particularly Toronto, is expected to see rising levels of immigration in the coming years, which is set to significantly impact buyer demand and home prices. As immigration rates rise, the demand for housing naturally follows suit. Newcomers need places to live and are often eager to buy homes and establish roots in their new city. This increased demand, particularly in desirable urban markets like Toronto, has the potential to drive up home prices due to the rules of supply and demand.

More buyers in the market competing for a limited supply of homes can lead to bidding wars and increased prices. Moreover, as international students and skilled immigrants continue to contribute to the city's cultural and economic fabric, their housing needs will also influence the market. As such, the surge in immigration projected for 2024 could make a robust impact on Toronto’s housing market, further fueling demand and positively influencing home prices.

4. Take Advantage of Credit Availability

Good credit is king in the real estate business. A solid credit score fetches you better mortgage rate options from your mortgage lender. Lower mortgage rates mean that you pay less over the life of your loan. If you have a good credit score, don't wait for things to change. The lower the interest rates, the lower your monthly payment. So step up now, first-time homebuyers and seasoned investors alike. Assess your personal finances, consult your financial advisor, and see what you may qualify for.

5. Increasing Rent Prices

Rising median rent is another compelling reason to consider buying a home today. The last year has seen an annual increase in rent across the board, making it less affordable for many people. Compare this to securing a 30-year fixed-rate loan with monthly payments that stay constant over the life of the loan. Buying a home might seem challenging, but it saves you from the unwelcome surprise of rent hikes every year.

As always, it's crucial to remember that the best time to buy property is often dictated by your personal circumstances and financial situation. It's better to buy a home when you're financially ready. Speaking to a financial advisor will aid you to navigate your circumstances best and make an informed decision.

Despite the fluctuations in mortgage interest rates or a temporary spike in pricing, investing in your own home can be a great thing. Our Canadian real estate market offers resilience and promising prospects, making it a believable candidate for worthy returns in the future.

Closing Thoughts

No matter the short term market share or the projected lower rates, there are abundant good reasons not to wait to purchase your home. Right now, amid all the worries and uncertainties, might just be the perfect time. Collect the courage, aim for your dreams, make your calculations carefully, and take the first step towards your long-time dream of homeownership.

For prospective homebuyers in Toronto, it's a great deal to invest in a home today rather than later. Whatever your financial situation or credit score, consult with real estate agents and consider your options. I hope these reasons have given you a little bit more confidence and insight into making the right move.

In the dynamic world of Toronto's real estate, it's never too early to begin your property journey. Even if you're just dipping your toes in the water and starting to contemplate the idea of a home purchase, immersing yourself in the market can set you apart from the competition.

That's where I come in as your dedicated real estate broker. I can get you started with a straightforward yet effective property drip for neighbourhoods you're interested in, keeping you updated with the latest listings that match your criteria.

This proactive approach can be an extraordinary tool, placing you in an advantageous position by keeping you informed, prepared, and one step ahead in our ever-growing competitive market. There's no downside to being on top of the game; it ensures that when the right opportunity presents itself, you are primed to seize it. Success in real estate often boils down to timing and preparation, and I'm here to ensure you've got both of these aspects impeccably lined up.

Remember, this blog post is for informational purposes only, and while I strive to provide accurate and timely information, there's no guarantee that such information is accurate as of the date it's received or that it will be valid in the future. Always consult with your financial advisor and trusted real estate professional before making any decisions.

Whether you’re new to the housing market or investing in new construction after a long time, or you're a seasoned buyer, your home purchase will always be a significant step. Let's not waste time waiting for the "right" time because, in the real estate market, the best time is now. Good luck out there!

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Whether you're looking to keep an eye on the market broadly or pinpoint specific properties in particular neighbourhoods, our search portal is equipped to cater to your personalized needs. Great Keep Realty Advisors prides itself as a boutique advisory firm with a decade of transactional experience, ensuring you have not just comprehensive listings at your fingertips but the wealth of expertise to support your every step. Start with us, and stay ahead of market trends with direct access to the latest and most relevant property data available.