Housonomix - 1 Dec 2023: 📉📈 Diverging Housing Forecasts, 🏘️ Exploring Regional Market Dynamics, and 🏡 Mastering Mortgage Refinancing 💼

Rate Watch Update - Keeping an Eye on the Market 🏦👀

In this week's edition of Rate Watch, we're observing the calm before the storm in the mortgage market. As we step into December, here's an overview of the latest mortgage rates:

• Steady as She Goes: The majority of rates have held their ground this week, mirroring last week's static numbers 🛑.

  • Insured 3-year fixed and 5-year variable rates remain unchanged at 5.84% and 6.10%, respectively.

  • Uninsured 3-year fixed rates are also steady at 6.44%.

  • Flexible lenders are consistent, with 2-year fixed rates at 6.89%.

  • Private lenders are holding their line with 1st mortgage rates at 8.99%.

• A Slight Ripple: There's only one notable change this week—a slight uptick in the 5-year variable uninsured rates by 0.15% to 6.85% ⬆️. This nudges the needle just a bit on the financial barometer.

• A Reminder: Please remember, these numbers are the starting rates and could vary based on individual financial profiles 🔄.

• Need Tailored Advice?: Curious about how these rates apply to you? Every financial journey is unique. Reach out to us at Ron Mortgages for personalized rate inquiries and find your best mortgage strategy with expert guidance 📧🔍.

Keep these rates bookmarked and stay tuned for next week's Rate Watch, where we'll continue to track the pulse of the mortgage market!

🌟🏠 Real Estate Radar: Exploring Dynamic Trends Beyond Toronto - Hamilton to Ottawa 📈📉

🌟 Welcome to this week's Real Estate Radar Section! As we eagerly await the latest data from the Toronto Real Estate Board, we're seizing the opportunity to broaden our horizons. In this edition, we delve into regions beyond the Greater Toronto Area, providing insights into markets that are increasingly relevant to our readers and clients. Stay tuned for updates from Toronto, and in the meantime, let's explore the fascinating trends based on Oct 2023 data in Hamilton, Oshawa, Kitchener-Waterloo-Cambridge, London, and Ottawa. 🏘️📊

• 📍 Hamilton: Average home price slightly down to $789,040. Detached homes 🏠 up 2.9% at $870,085, while semi-detached and townhouses 🏘️ down 3.9% to $653,523. Condo apartments 🏢 up 3.5% at $495,705. Sales decreased by 10.3%.

• 📍 Oshawa: Average price up 2.8% to $804,047. Detached homes 🏠 up 3.3% at $874,717, but semi-detached 🏘️ down 6.9% to $636,941. Apartment prices 🏢 up 6.5% to $458,280. Sales down 25.5%.

• 📍 Kitchener-Waterloo-Cambridge: Average price up 0.6% to $767,848. Detached homes 🏠 up 3.5% at $890,591, townhouses 🏡 slightly up, but apartments 🏢 down 2.5% to $476,166. Sales up 12.2%.

• 📍 London: Average price down 1.7% to $629,605. Apartments 🏢 down 16% to $350,000, townhouses 🏡 up 10% to $562,000, single-family homes 🏠 slightly down to $679,000. Sales slightly decreased.

• 📍 Ottawa: Average price up 5.9% to $660,836. Single-family homes 🏠 up 4.8% at $810,319, but townhouses 🏘️ and apartments 🏢 down slightly. Sales decreased by 17.3%.

Maple Pulse: Renewal Worries, Housing Price Forecasts, Rent-Income Gap, Funding Criteria Debate & Toronto's 2024 Outlook 🏘️📉💼

Welcome to this week's Maple Pulse 🍁📰, where we delve into the ever-evolving landscape of Canada's housing market. In this edition, we dissect a range of critical topics, from just released data confirming a Q3 GDP contraction to major banks forecasting a downturn in Canadian housing prices. We also examine the unprecedented rise in rental costs outpacing income growth, Ontario’s decision on housing fund eligibility, and Re/Max’s predictions for Toronto’s housing market in 2024. Join us as we navigate these complexities, offering insights for homeowners, buyers, and investors in these turbulent times 🏠💹.

• Unexpected Economic Contraction in Canada in Q3: In the third quarter of 2023, Canada's economy unexpectedly shrunk by 1.1% on an annualized basis, a stark contrast to the expected growth and a clear sign that the aggressive interest-rate hikes by the Bank of Canada have heavily impacted economic growth and household spending. This decline in GDP, the weakest since 2009 excluding the pandemic period, suggests a near-recession state despite slight growth in October. The slowdown has led to speculation about a potential easing of interest rates in the coming year as the economy struggles to maintain growth amid rising inflation and stagnating consumer spending.

• Major Banks Forecast Drop in Canadian Housing Prices: Major Canadian banks are projecting a notable decrease in national home prices, emphasizing a cooling housing market. TD Economics has significantly revised its predictions, foreseeing a drop of up to 10% in average home prices by early 2024, with a potential decline of 20-25% from its peak earlier this year to the first quarter of 2023. This change in forecast is attributed to high interest rates and regional market weaknesses, particularly in British Columbia and Ontario. Similarly, Scotiabank's macroeconomic scenarios suggest a 1.9% decline in national home prices over the next year, with even the most optimistic scenario showing only a 1.3% increase. They anticipate a slower growth rate in the medium term, regardless of the scenario. And finally, the Canadian Imperial Bank of Canada (CIBC) reports a 45% drop in home sales since early 2021, falling below the pre-pandemic 10-year average, suggesting a significant market downturn not seen since the 2008 recession. Initially, from early 2022 to early 2023, there was a 31% fall in new listings, which contributed to stemming the decline in home prices. However, this trend is now reversing, with new listings increasing by 31% from the low point in March 2023.

• Canadian Rental Market Outpacing Income Growth: A new report from BMO highlights a significant shift in the Canadian rental market, where for the first time in 60 years, rental price growth is outstripping income growth. This development is underscored by the record growth of rental prices, which surged by 8.2% in October 2023, marking the highest increase since 1983 and significantly above the 20-year average before the pandemic. BMO Chief Economist Douglas Porter notes that this rise in rents far outpaces the trend in personal income, which has seen an average annualized growth of only 3.9% over the past five years. This disparity indicates a challenging economic environment for renters, as the cost of renting is increasing at a much faster rate than their incomes.

• Ontario Rejects Changes to Housing Fund Eligibility: In a recent decision, Ontario's Housing Minister Paul Calandra has turned down a request from the Ontario Big City Mayors group to revise the funding criteria for housing infrastructure. They had proposed basing eligibility on the number of building permits issued, rather than housing starts, due to the impact of high interest rates and supply issues on construction. This change was sought to help meet the province's target of building 1.5 million homes by 2031. However, out of 50 municipalities with assigned housing targets, only 14 are on track to meet these targets this year. Calandra's decision, which has drawn criticism for potentially impeding infrastructure development and housing construction, was made during Ontario's first annual housing forum, where another housing bill and a modular housing framework were announced as part of the government's ongoing housing strategy efforts.

• Re/Max 2024 Forecast for Toronto Housing Market: Re/Max predicts Toronto home prices will drop by 3% in 2024, while Kitchener faces an 8% decline due to tech industry struggles. In contrast, Windsor could see a 7.5% rise. Nationally, a modest 0.5% increase in average home prices is expected. The GTA market is likely to be more balanced, occasionally favoring buyers, with Toronto's condo market expected to recover after significant corrections in 2023. This comes amid high living costs and interest rates prompting buyers to seek properties with rentable spaces. Despite regional declines, strong overall demand and a supply shortage in Ontario are set to mitigate significant market depreciation.

Conclusion for current and potential homeowners: Amidst mixed forecasts from banks and Re/Max, predicting a significant downturn 📉 and a modest increase ⬆️ in home prices respectively, caution remains paramount in navigating Canada's housing market 🇨🇦🏡. Recent history has shown that short-term predictions often miss the mark 🎯. However, one constant is the persistent scarcity of housing in Canada, fueling robust demand 💪. This is exemplified by the unprecedented surge in rental prices 🚀, signaling a shift in housing demand from buying to renting due to soaring interest rates 💸. For prospective buyers and investors, it is crucial to stay informed and vigilant 🧐, capitalizing on opportunities as they align with individual circumstances and market timing ⏳. The landscape is evolving, and strategic decision-making is key in this dynamic environment 🔑.

Mortgage Mastery: The Essentials of Refinancing 🏡

Refinancing a mortgage involves replacing your current mortgage with a new one, often with different terms. It's a strategic financial decision that can offer several benefits, tailored to meet various financial goals. Let's explore the key aspects of refinancing:

1. Accessing Home Equity: As you pay down your mortgage and as property values rise, you build equity in your home 🏠. Refinancing can allow you to access this equity, providing funds for home renovations, consolidating debt, or other financial needs. This is often achieved through a home equity line of credit (HELOC) or a cash-out refinance 💰.

2. Debt Consolidation: By consolidating higher-interest debts (like credit cards or personal loans) into a mortgage with a lower interest rate, refinancing can lead to lower monthly payments and a more streamlined debt management process 📉.

3. Changing Mortgage Features: Refinancing can also be used to adjust the features of your mortgage 🔄. This could mean switching from a variable-rate to a fixed-rate mortgage for more predictable payments, or altering the amortization period to either pay off the mortgage faster or to lower monthly payments.

4. Lowering Interest Rates: In a (eventual) decreasing interest rates environment refinancing will help you secure a lower interest rate 🔽. This can lead to significant savings over the life of your mortgage. A lower rate not only reduces your monthly payments but also alters the ratio of principal to interest in each payment, enabling faster equity building.

Process of Refinancing:

• Assessment of Financial Goals: It's crucial to begin with a clear understanding of your financial objectives 🎯. Whether it's reducing monthly payments, paying off the mortgage faster, or accessing equity, your goals will guide the refinancing process.

• Credit Score and Financial Health Check: Lenders will reassess your creditworthiness. A good credit score and stable financial situation can lead to more favorable refinancing terms ✅.

• Shopping for Rates and Terms: It's advisable to compare rates and terms from different lenders to find the best deal 🔍. Consider working with a mortgage broker who can assist in this process.

• Appraisal and Lender Approval: Your property will likely need to be appraised to determine its current value. The lender will then review the application, considering factors like your home's value, your income, debts, and credit score 📋.

• Closing the Refinance: Similar to your original mortgage, refinancing involves closing costs which can include appraisal fees, legal fees, and possibly a penalty for breaking your current mortgage early. These costs should be weighed against the potential savings 💸.

Conclusion and Considerations: Refinancing can be a powerful tool for managing your mortgage and broader financial situation. However, it's important to carefully consider the costs and benefits. Factors like the potential for interest rate changes, the cost of breaking your current mortgage, and your long-term financial goals should be thoroughly evaluated 👍.

For personalized advice and more details on how refinancing can fit into your financial strategy, please reach out to us at Ron Mortgages 🤝.

Laughs & Lifts 😂💪