{"id":1032,"date":"2023-06-19T01:06:56","date_gmt":"2023-06-19T01:06:56","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=1032"},"modified":"2023-09-25T20:03:40","modified_gmt":"2023-09-25T20:03:40","slug":"housing-market-rebound-may-lose-momentum-with-boc-rate-hike","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/housing-market-rebound-may-lose-momentum-with-boc-rate-hike\/","title":{"rendered":"Housing Market Rebound May Lose Momentum with BoC Rate Hike"},"content":{"rendered":"
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Only 2 days remaining in Spring before we have the longest day of the year and the official start of summer on June 21. So if we\u2019re to look back at Spring here, we can see that one of the more forefront stories in Canadian real estate circles for Spring 2023 was the \u2018rebound\u2019 seen in the housing market. We saw the first national year-over-year sales increase in almost two years, and looking at that from ground level it was a very welcome change for homeowners who had shelved plans to put their homes on the market before the chill came.<\/p>\r\n\r\n\r\n\r\n

It’s been a promising turn of events, if not a natural resumption of the standard realities of market forces doing what they do. That\u2019s preferable for homeowners, but at the same time there is still a pressing need to find a balance and there are still too many people who are shut out from owning a home despite having a good income and credit history. That itself may be a discussion for another time, but it\u2019s important to say that those who take exception to home prices have their grievance with federal and municipal governments rather than homeowners themselves.<\/p>\r\n\r\n\r\n\r\n

Realtors are among those who\u2019ll be happy to see this rebound, but one thing it will not alter is the competitive nature of the business. Realtors who are newer to it may be at a disadvantage no matter how strenuously they try to generate new clientele, but for these agents our online real estate lead generation system<\/a> here at Real Estate Leads<\/a> is an excellent way to get better results from those efforts.<\/p>\r\n\r\n\r\n\r\n

Let\u2019s now turn to looking at the housing market rebound in greater detail, and specifically with how it may run out of steam to at least some extent.<\/p>\r\n\r\n\r\n\r\n

Better than Incremental Gains<\/strong><\/h3>\r\n\r\n\r\n\r\n

The housing market gains seen in May that came after an 11.3% spike in April did narrow the gap between current sales rates and pre-pandemic levels, said RBC assistant chief economist Robert Hogue. Home sales are now just 6% down from where they were in February 2020, the approximate time when the pandemic was about to begin and turmoil was to reach into every aspect of Canada\u2019s economy.<\/p>\r\n\r\n\r\n\r\n

But this current recovery rate is stronger than expected, and gains were seen across the entire country. Every province had sales numbers up considerably, and the largest increases were in British Columbia. There sales increased 23%, and Ontario was a close second with 22%. As for individual cities, not much surprise in seeing that in Vancouver and Toronto home sales increased 35% and 32% respectively.<\/p>\r\n\r\n\r\n\r\n

For the second consecutive month median home prices were up across the country too. The national composite MLS Home Price Index fell 15% from its February 2022 peak, has now gained 4.1% over just the last two months. May\u2019s 2.1% rise lines up with the average monthly rate of increase seen during the market boom.<\/p>\r\n\r\n\r\n\r\n

By Cities<\/strong><\/h3>\r\n\r\n\r\n\r\n

Here are cities that enjoyed sharp increases in prices. Cambridge, Ontario had prices go up 4.9% month over month, and the number for Northumberland Hills was 4.7%. For Sudbury it was 4.5% and 3.6% for Kitchener-Waterloo. Getting right into the Big Smoke, Greater Toronto was up 3.1%. Heading out west to BC the gains were more modest, with Fraser Valley (Abbotsford \/ Chilliwack) leading the way with a 2.4% rise. Other notables in Canada were Winnipeg with 0.9% and Halifax with 0.8%.<\/p>\r\n\r\n\r\n\r\n

What we can say with certainty is that the sudden turnaround is by and large attributable to interest rates. Let\u2019s remember that it was the central bank\u2019s aggressive hiking campaign over last year that initiated the housing market\u2019s downward spiral, and the signal in March that the worst of rate hikes might be over really reinvigorated demand and pulled prospective buyers and sellers out of their slumber.<\/p>\r\n\r\n\r\n\r\n

That enthusiasm chilled in a big way when earlier this month the BoC changed their mind (not without good logic for doing so to be fair) and raised rates by another 25 basis points to 4.75%. We can be nearly certain that\u2019s going to take a LOT of steam out of the recovery and pull back on the momentum that\u2019s been gained over recent months.<\/p>\r\n\r\n\r\n\r\n

Dampening Market Optimism Too<\/strong><\/h3>\r\n\r\n\r\n\r\n

Industry experts are indeed saying that the Bank\u2019s latest 25 basis-point rate hike will definitely dampen market psychology. That hike did take commercial banks\u2019 prime rate to 6.95%, a 22-year high but what is noteworthy with regards to this discussion is that bond yield rates are climbing at the same time. What this does is push up shorter-term fixed mortgage rates, and up until now they\u2019ve been a popular \u2013 and viable \u2013 alternative to variable rates.<\/p>\r\n\r\n\r\n\r\n

The Royal Bank also feels the current strength in the market will not likely be sustained for the rest of the year, and they chime in similarly with saying that the 25 bp rate hike should cool demand by at least a few percentage points overall and for individual housing markets too.<\/p>\r\n\r\n\r\n\r\n

__<\/p>\r\n\r\n\r\n\r\n

Sign up for Real Estate Leads here<\/a> and receive a monthly quota of qualified, online-generated buyer and \/ or seller leads that are delivered to only one realtor \u2013 you. Plus these leads will be for prospective clients who have indicated a genuine willingness to either buy or sell a home in the city or town in Canada where you are working as a real estate agent. It presents you with the opportunity to be first in-touch with them and impress upon them the fact that you are the industry pro they need guiding them through the process for maximum returns on the sale of the home or best interests in purchasing it.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

Only 2 days remaining in Spring before we have the longest day of the year and the official start of summer on June 21. So if we\u2019re to look back at Spring here, we can see that one of the more forefront stories in Canadian real estate circles for Spring 2023 was the \u2018rebound\u2019 seen […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1032","post","type-post","status-publish","format-standard","hentry","category-general-topics"],"yoast_head":"\nHousing Market Rebound May Lose Momentum with BoC Rate Hike - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"Housing Market Rebound May Lose Momentum with BoC Rate Hike - Real Estate Leads Blog\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realestateleads.ca\/blog\/housing-market-rebound-may-lose-momentum-with-boc-rate-hike\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Housing Market Rebound May Lose Momentum with BoC Rate Hike - 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