Everyone is quite aware that the housing industry has been on fire for the past two years. Most people would have thought with Covid, the housing market would have been affected. It was, but just differently. Covid made where people live matter to them. They wanted out of close, confined condo apartment living and move to more open-spaced suburban areas. People needed larger space as the home became the office and the school all at the same time. With historically low-interest rates and a lack of inventory, housing prices grew. With many Covid restrictions lifted now, slight interest rate hikes, the current cost of gas and the ongoing war in Ukraine, the housing market has cooled slightly across much of Canada. This has created an opening for homebuyers who had been pushed to the sidelines to get into the real estate market finally. Homebuyers, this is your time!
Many communities are seeing homes sit a little longer on the market and are not selling in the multiple offer situations. We are seeing conditions like financing and home inspections come back to sales. This is the perfect time for buyers to act! Some unfortunate home sellers purchased in the heated market and had not sold their current homes. Some of these people are not in a position to own two homes and must sell, so we have seen some desirable home prices recently. As real estate history has shown time and time again, property values will eventually rise. This is a perfect time for buyers to get into the market.
Contact a trusted Real Estate Agent
The first step a buyer should take is to reach out to a trusted real estate agent. We can walk you through the process of buying. Part of our service is to align you with top mortgage professionals to ensure your financing will be in place. Studies show that the Millennials are the largest group who intend to purchase their first home or move up in the next year. First Time Homebuyers should work with a REALTOR® who specializes in this area. The agent will walk them through the buying process and make the experience as stress-free as possible. Even if you are not quite able to buy now, a good REALTOR® will work with you to devise a step-by-step plan to get you in a position to buy.
For any homebuyers looking to have a mortgage, the lender will look at GDS – Gross Debt Service Ratios and TDS – Total Debt Service Ratios. These ratios will indicate how much a mortgage a person can afford based on their income and current debt responsibilities. If the numbers are not favourable, we can develop a plan to get you there. The overall objective would either increase your income or decrease your debt.
Here are four options for homebuyers:
- More Time. Maybe you need more time to pay down some debt or more time to save for a more significant down payment.
- Location Location! Maybe this is time to expand your search radius. With more people able to work a hybrid work schedule, commuting may not be such a problem. Your real estate professional can guide you to areas that may offer a little more home for slightly less money.
- Make Some Extra Money! There may be an opportunity to rent out your garage for storage, get a roommate, rent out your basement or buy a place with an existing legal apartment. Realtors can offer some guidance in this area.
- Start Somewhere! Your first home may not be your dream home. But, owning a home, even if it is smaller than you like, has no yard or needs work, is much better than paying rent. You are building equity in your home. Not many people can save as much money as they make on the appreciation of their home. Use that equity to move up in a few years. You need to start!
Homebuyers today need to think outside the box
So maybe buying a home that needs some work is a great option. Your REALTOR® can explain how a Purchase Plus Improvement Mortgage can work. This can get you into a house and have it finished precisely the way you want it done.
We know that most Canadians can afford to pay a mortgage because we see the amounts people are currently paying in rent. The problem is saving for the minimum down payment of even 5% of the purchase price. But, again, talking with your trusted real estate agent, they may come up with ideas of how you can get that down payment through a gift from family, RRSPs, Government incentives in different municipalities or many other ideas.
We know the goal of many Canadians is homeownership. However, the path to getting there is a marathon rather than a sprint. Slow and steady wins the race. Top real estate professionals will guide you when the time is right to make your move. Now is the time for homebuyers!