As expected, rates are beginning to fall + MORE Jul 17th

We have some good news for would-be Canadian home buyers: slightly lower mortgage rates and a dip in home prices have made it easier to purchase a property in nearly half of the nation’s major markets.

This is according to the latest monthly affordability report from Ratehub.ca (Ratehub.ca and MoneySense.ca are both owned by Ratehub Inc.) The study crunches the income required to purchase an average-priced home across Canada, using national real estate data from May and June this year, as well as mortgage and stress test rates.  This makes it possible to track how affordability conditions are evolving on a monthly basis, and how specific markets are impacted by trends in borrowing costs.

The June data reveals that buyers needed less income to qualify for a mortgage in six of 13 markets studied. This reflects a small decline in the average five-year mortgage rate, from 5.49% to 5.47%, and an accompanying mortgage stress test of 7.47%. Mortgage rates lowered somewhat over the course of the month…

Selling your home while purchasing a new one can sometimes feel like a balancing act, especially when the sale of your current home doesn’t align with your next purchase.

If you carry a mortgage on your home, you’re legally obligated to have home insurance—but that doesn’t necessarily mean you’re covered against everything life may throw at you. Notably, home insurance typically doesn’t include coverage of water damage from floods and leaks, nor does it cover sudden water damage due to water seeping into your home through your roof or above-ground walls. This is true even for insurance policies that offer the most extensive coverage.

Here’s why that matters: In recent years, climate change has led to more frequent damaging rainfall events (such as severe downpours and thunderstorms), and certain regions are naturally prone to flooding. A flooded basement isn’t cheap to fix—in fact, the average cost to repair that type of damage is over $40,000.

The Insurance Bureau of Canada (IBC) notes that extreme weather events result in an average of $2 billion in annual losses across the country—mostly due to water-related damage. “Over the last decade, there have been more than 35 catastrophic flooding events across Canada in which insured losses exceeded $30 million per flood,” the IBC reports on its website…

Some good news on mortgage rates…

Mortgage Brokers are receiving good news this week from many financial institutions.  Wholesale fixed mortgage rates are falling.  Great news for anyone buying, refinancing or renewing their mortgage in the near future.  

The news comes as a reaction to lower than expected inflation rates. We saw  2.7% vs the expected 2.9% reported.  And the US economy is finally seeing signs

of a sluggish economy. There’s a saying… Bad economic news is good news for mortgage news.  

Next week…

The Bank of Canada is meeting July 24th for the 5th of 8 regularly scheduled meetings to set the rate.  They are now in a position to make the second cut of the year.  Many economists and financial experts have been forecasting for rate cuts of over 2.00% by the end of 2025. Goodness knows we can all use the break.  

My advice..

Be careful not to choose the wrong term. With rates expected to fall further, you will want to position yourself to fully benefit from potential cuts…

Canada Mortgage and Housing Corp. says the annual pace of housing starts in June fell 9% compared with May.