Should I Wait to Get a Mortgage?
June 29, 2021 | Posted by:
This first-time buyer question has become a bit more common through the last year, as some people have taken a wait-and-see approach when it comes to major financial decisions. However, they also understand that there may be an opportunity cost to delaying home ownership. While we understand the trepidation in light of all that has occurred through 2020-21, more recent events point in the opposite direction. This is especially true for the greater Winnipeg area. Let’s review.
Why First-Time Home Buyers in Winnipeg Should Not Wait Any Longer to Get a Mortgage
Historically Low Rates Won’t Stay That Way
In 2021, both the 5-year fixed rate and variable rates have hit historically low levels. While there have been small upticks in the cost of borrowing, they still remain extremely low. However, with economic reopening plans well underway in Winnipeg and across Canada, the Bank of Canada is expected to raise the overnight rate (which raises variable rates) and ramp up bond purchases (which raises fixed rates) at some point in 2021. By waiting much longer, you will effectively pay more to buy a home. By acting now, you can lock-in remarkable fixed rates, or enjoy low variable rates for the interim. In either scenario, you are looking at a much lower cost of entry into the market. Get pre-approved today.
Inventory is Getting Lean
Historically low borrowing rates have spurred massive growth in home sales across Winnipeg. Despite economic hardships, real estate inventory has been flying off of the proverbial shelves. While your dream home is still out there, it won’t be on the market for much longer. Pre-pandemic, a typical property would last up to 90 days on the market, but now the same properties are only available for about 14-days. Experts predict this trend to maintain for the rest of 2021, as even though borrowing rates may rise, the average price of a Winnipeg home is still favorable when compared to the rest of Canada. Get pre-approved as soon as possible, to get the process rolling.
Prices Will Rise
As we stated above, the median price for a Winnipeg home is far better than what shoppers find in other metropolises across Canada. However, why pay more than you need to by waiting? At press, the average cost to buy a home is over $335,000. That’s amazing, right? However, a year ago that number was about $300,000. For some properties, the year-over-year price increase has been upwards of 50 percent! By waiting a month or two, you could be paying an extra five, ten, or fifteen-thousand dollars for the same property. If you wait until the end of the year or into 2022, you could be paying much more. Waiting effectively increases your required downpayment, monthly mortgage payments, and reduces your odds of passing the latest mortgage stress test.
“Should I wait to get a mortgage” you ask? When it comes to Winnipeg for the remainder of 2021, the answer is clear. Don’t let the current opportunity pass you by. Contact Ron Chan today at 204.290.9950 for a friendly, noncommittal conversation.