What homes will homebuyers look for 2018?
New Canadian mortgage rules come into effect on January 1, 2018. These rules may lead to some homebuyers qualifying for less money on their mortgages.
As mortgage approvals will be for less money, buyers will be searching for lower-priced homes, particularly those under $500,000. Paul D’Abruzzo, an investment advisor with Rockstar Real Estate, told Canadian Real Estate Wealth, “if somebody was preapproved for $500,000, their new approval will be $400-450,000, so they will lose 10-20% of their preapproval amount.” This won’t completely shut them out of the market though.
The Lethbridge area already has a wide variety of home prices so we may not see a huge increase in demand for homes under $500,000 but there is the possibility that moderately priced single-family homes will be in even higher demand than previous years and this could lead to more buyers looking at condos.
January and February are expected to be slower months as many people wanted to buy or sell before the end of 2017. As mentioned in our previous blogs, buying during the winter can be beneficial as sellers are more motivated and inventory is lower so there’s less competition for home sellers.
CREW also reports that while there is speculation that first-time homebuyers won’t be able to purchase a home under the new mortgage rules, that won’t be the case and starter homes will still be available for them. However, first-time homebuyers may live in their starter homes longer than the historical average of three to five years, and may not move to the next level of housing for five to seven years.
If you’re looking to buy or sell a home, call José Rauda and Lisa Shaw today at (403) 329-8899 and see how our team will help you with your real estate endeavours.