This past year we saw many challenges in the housing sector. There were the recent changes to the mortgage rules that included a "stress test” for all insured mortgages. This means that all insured mortgages must be qualified at the benchmark rate, which is currently 4.64%. This may affect home buyers with less than 20% down payment who are looking for a fixed rate mortgage.We saw housing prices increase in some areas of the country while in other areas we saw a slowdown of housing activity, and yet other parts of the country are still feeling the effects of falling oil prices. We’ve also seen the fixed-rate on mortgages start to climb due to the upward pressure on bond yields and increases to the cost of funds.The Canadian dollar is trading at approximately 74 cents to the US dollar (at the time of this writing) and there is concern about high consumer debt. The market is still jittery about the policies of the incoming US president. Yet Canadians are resilient. Despite gloomy predictions, despite increasing debt loads, despite all the changes we have endured, we continue to look on the bright side and consumer confidence is high.While the housing market did slow somewhat in many parts of the country, there are signs of life. While there are still some issues surrounding affordability for first time home buyers, the market appears to be self-correcting, as many economists predicted it would.The Canadian Real Estate Association’s prediction for 2017 is a mixed bag with sales easing slightly in some provinces and rising in others. The national average home price is expected to decline in 2017, easing affordability for first time home buyers. It seems the market is balancing itself with an increasing supply of listings to meet demand in some markets.If you’re thinking of buying a new home, let’s do our own stress test. Too often, consumers focus on the total mortgage amount they qualify for instead of looking at their desired lifestyle and retirement goals. If you’re in the process of arranging a new mortgage, renewing a mortgage or refinancing an existing mortgage, then let’s stress test it.
Wishing you health, happiness, and prosperity in 2017. Since we’re starting a new year, it’s also a good time to discuss any financial changes to your household and if and how that will affect your mortgage. Together, we will review your financial situation and tailor a solution that works for you. Call me today.
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