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Choosing the right time to buy a home is always tricky.  Although the market has softened a little in our area this year compared to last, it is still a strong market, which can make what is likely the biggest purchase you’ll make in your life a stressful one.  If you haven’t purchased a home in the past few years, here are a few things you should know about our current market.

Both variable rate and fixed rate mortgages have increased in the past year. Variable rate mortgages are primarily indexed against the Bank of Canada’s prime lending rate, which has increased twice by 25 basis points this year to 1.5%. Most or all variable mortgage rates will be higher than that, with many hovering slightly under 3.0% for a 5-year rate.

While longer (5-year) term variable mortgages offer lower rates, in the fixed rate mortgage world, shorter terms (1- or 2-year) on fixed rate mortgages tend to be lower than their long-term counterparts, at the cost of less long-term certainty.

You can often qualify for lower rates depending on your credit rating. A local mortgage broker can also help you navigate the world of mortgages and explain all the options to find the product that’s best for you. In addition, they are often able to get preferred rates from mortgage lenders.

In the first half of 2018, the Kitchener-Waterloo area sold 19.1% less homes compared to the same period in 2017, and in the early part of this year in Guelph, 15.5% less homed were listed in 2018 compared to 2017. 24.9% less units were sold in the first half of 2018 compared to 2017. But that doesn’t mean we are trending to a “buyer’s market.”  There were less homes listed for sale from January to June this year, and June 2018 had 40.1% less homes listed than 10-year June average of 1,728.  The homes that were listed and sold did sell for slightly more than last year.  Still, with the rate of selling decreasing, this year’s buyers likely will not be pressured to issue unconditional offers, which can give you the time to schedule a home inspection and get to know your new home before fully committing.

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