{"id":1038,"date":"2023-07-17T00:09:28","date_gmt":"2023-07-17T00:09:28","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=1038"},"modified":"2023-09-25T20:36:45","modified_gmt":"2023-09-25T20:36:45","slug":"ongoing-boc-rate-hikes-unlikely-to-pull-back-on-home-prices","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/ongoing-boc-rate-hikes-unlikely-to-pull-back-on-home-prices\/","title":{"rendered":"Ongoing BoC Rate Hikes Unlikely To Pull Back on Home Prices"},"content":{"rendered":"
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As was expected, last Wednesday the BoC raised the bank\u2019s interest rates again, and with much the same rationale as before \u2013 saying the 25-basis point rise is again necessary to counter inflation and based on unforeseen developments in the National economy. All of which would appear legitimate if you ask the same economists who will tell you this was inevitable based what was underway at the federal level with money-printing adventures at around 3 years ago this time.<\/p>\r\n\r\n\r\n\r\n

Which of course is financed by the same taxpayers who then have to wear the weight of that indiscretion afterwards, and that\u2019s not a very appealing prospect for all sorts of people for all sorts of reasons. Homeowners who are stretched too thin with higher and higher monthly mortgage payments, and if you\u2019re one of those with a variable rate one then the news from last week may well be exactly what you didn\u2019t want to hear if your finances are tight.<\/p>\r\n\r\n\r\n\r\n

We don\u2019t need to detail any further how higher interest rates takes the wind out of home sails sales, as it\u2019s fairly straightforward when astute people make decisions about whether they can really afford to take on that mortgage right now. That\u2019s going to equate to fewer homebuyers reaching out to realtors for help with their first-time home buying process, but our online real estate lead generation system<\/a> is a way to counter that trend and see to it there\u2019s not much of a dip in the number of new clients you\u2019re drumming up.<\/p>\r\n\r\n\r\n\r\n

Back to topic though, let\u2019s use this week\u2019s entry to get a clearer look at why the belief in the industry is that these rates hikes aren\u2019t going to do much to factor into lower sales prices for homes, at least anytime this summer. And of course with Spring and Summer being the two seasons when homes in North America are most actively bought and sold.<\/p>\r\n\r\n\r\n\r\n

Surprising Rebound<\/strong><\/h3>\r\n\r\n\r\n\r\n

A recent RBC economics report shares the belief that these rate hikes from the Bank of Canada won\u2019t promote much of a decline in home prices, if any. Yes, the 25 basis-point rise in the Bank of Canada\u2019s policy rate should cool demand by a small amount over a limited period of time. The expectation is for conditions to ease some more over the foreseeable future and bringing markets closer to balance.<\/p>\r\n\r\n\r\n\r\n

That evaluation is made based on the acknowledgment that the housing market has rebounded more rapidly than most economists foresaw it coming back. The BoC\u2019s director had conveyed to Canadians in that the central bank was pausing its hiking campaign in January, and there are some industry insiders who believe that the strong market rebound that coincided with that in late January \/ early February was a fairly direct outgrowth of that.<\/p>\r\n\r\n\r\n\r\n

That lines up with the increasingly broad rise in home sales over April and May created numbers that were a lot closer to pre-pandemic levels for that time of the year, and the belief is that a lot of that enthusiasm was built on the belief that interest rates were unlikely to be going up again.<\/p>\r\n\r\n\r\n\r\n

And so while rates DID go up and again and real estate purchases are taking a noticeable hit because of it, the fact is that home resales are now just 6% below what was considered to be a \u2018vibrant\u2019 level in February of 2020.<\/p>\r\n\r\n\r\n\r\n

Market Will Bear<\/strong><\/h3>\r\n\r\n\r\n\r\n

Much of this can be attributed to the age-old maxim that prices are set by what the market will bear, and those who can afford those prices are the ones who set the market. Whether that\u2019s right or wrong that\u2019s the way it works and although the pool is shallower there are still people who can afford to buy houses and take on mortgages despite the current state of the market and interest rates playing their role.<\/p>\r\n\r\n\r\n\r\n

And so here we are with prices remaining below year-ago levels, but the belief is that is a not-for-long reality for Western Canada, parts of the Atlantic Provinces, and Quebec. Prices gains are foreseen for these reasons coming up fairly soon, and those stronger prices could be increasingly convincing for sellers to list their homes and promote more summer sales activity.<\/p>\r\n\r\n\r\n\r\n

That may occur to an extent, and while more inventory may bring down prices to a point the more likely scenario is that this now 5% range means that a housing market revival isn\u2019t going to pick up much traction in this current fiscal environment.<\/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 sellers leads that are made available to you exclusively. They\u2019re yours and yours alone, and they\u2019ll be proving names and contact info for people living in the region of the country where you\u2019re working as a realtor, and these individuals or couples will have shown their genuine interest in either buying or selling a home. This is an excellent way to get better results from your efforts to acquire new clients, and our testimonials<\/a> page can let read of other realtors who are happily extolling the benefits of this real estate agent lead system.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

As was expected, last Wednesday the BoC raised the bank\u2019s interest rates again, and with much the same rationale as before \u2013 saying the 25-basis point rise is again necessary to counter inflation and based on unforeseen developments in the National economy. All of which would appear legitimate if you ask the same economists who […]<\/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-1038","post","type-post","status-publish","format-standard","hentry","category-general-topics"],"yoast_head":"\nOngoing BoC Rate Hikes Unlikely To Pull Back on Home Prices - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"Ongoing BoC Rate Hikes Unlikely To Pull Back on Home Prices - 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\/ongoing-boc-rate-hikes-unlikely-to-pull-back-on-home-prices\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ongoing BoC Rate Hikes Unlikely To Pull Back on Home Prices - 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