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Market Update - Oct 2024

Interest Rate

The Bank of Canada dropped the key interest rate by 50 points to 3.75% on Wednesday (bankofcanada.ca). This is the fourth consecutive drop since it was 5.0% in April 2024, and the first 50-point drop since March 2020. Markets are anticipating further rate cuts until summer 2025, with expectations for the rate to settle in the upper 2% range. The next rate announcement will be December 11, 2024. 

 

Market Trends

New Listings are mostly up in September 2024 compared to September 2023. Meanwhile, the Average Days on Market has increased significantly. This means more listings are coming up on the market, and they are taking much longer to sell compared to last year. Prices are up slightly for most regions, they have remained quite stable throughout the year.
 
 
 

Upcoming Changes

The federal government is implementing two changes to mortgages effective December 15, 2024, aimed at helping younger buyers with affordability (cbc.ca/news).

30-year mortgage terms will be available to all first-time buyers for all homes. Previously, first-time buyers could only get a 30-year mortgage on newly built homes; this is now expanding to re-sale homes as well. This will reduce the cost of monthly mortgages (although it increases overall interest paid), and thus improves affordability for first-time buyers.

Mortgage default insurance will now be capped at $1.5 million, up from the previous cap of $1.0 million. This change means that buyers do not need a 20% downpayment unless the home’s price is $1.5 million or more. If the home’s price is under $1.5M and you have less than a 20% downpayment, your mortgage will be covered by CMHC insurance (which comes with a premium). This change will decrease down payment requirements, which is a significant barrier to entry of home ownership for young buyers.

 

We hope you've found this information useful in keeping informed on the market. Thank you for your support and business!