You’ve made the decision—you’re going to bite the bullet and try your luck on the housing market. While it’s true that there have been more difficult times to buy in the recent past, there are still some difficulties facing would-be buyers that are worth taking into consideration.
Before you wade into the market, make sure you know what you’re getting into. Here are three hurdles currently facing homebuyers.
Inventory levels are low. The less inventory on the market, the more prices will inevitably rise, as buyers duke it out for limited listings. A balanced housing market tends to have at least six months of supply—in Canada’s hottest markets, supply sits well below the six month threshold. Those looking to buy this year will have to accept limited choices.
Prices are still historically high. Depending on where you’re looking to buy, you’ll likely be facing a high price tag. In major Canadian cities with booming job markets, prices have been moving up for months, as supply dwindles.
Interest rates won’t stay low forever. Interest rates have been low for years, as the Canadian economy struggled to recover from the 2008 financial crisis. But things are about to change—the Bank of Canada is likely to hike the overnight rate, in which case you may have a higher monthly mortgage payment.
