Best Time of the Year to Get a Mortgage in Winnipeg
May 8, 2018 | Posted by: Ron Chan
After weighing both the typical and not-so typical considerations over whether or not you're ready to enter into a mortgage, you have come to the conclusion that you are indeed ready to buy a home in Winnipeg. First of all, congratulations! But now you may be wondering if there is a best time of the year to do so? Does it really make a difference? There are many opinions on the matter, and today, we'll take a look at some factors that can impact your opportunity to find a home that's perfect for you, and at the right price.
5 Things You Need to Know About the Best Time of the Year to Buy a Home in Winnipeg MB
1. Prices Tend to be Seasonal (But...)
There is a general and logical rule of thumb when it comes to the price of residential real estate in Canada. Prices tend to be higher in the spring and summer (peaking in June/July), then as a home sits longer on the market, homeowners make adjustments in an attempt to sell their property before the year end, which is when you would typically see the average median price drop from autumn (less than half a percent) into winter (typically between 2 and 3 percent). If a home is still on the market as the new year begins (assuming the owner has had it up on the market for up to a year already) you can expect to see a much significant drop in price (commonly 5 to 8 percent) in January through to February. Keep in mind that this is a general rule, and note that Winnipeg doesn't always play by them. For instance, in March 2018, when home prices would typically be coming off of their supposed price reductions, the city’s average housing price rang in at $327,959, a 3% increase from the city’s average housing price for all of 2017. In fact, the aggregate price of a home in Winnipeg saw healthy growth in the first quarter (aka winter) of 2018, rising by over 5 percent year-over-year. So take the seasonal price fluctation expectations with a grain of salt in our neck of the prairies, and keep reading.
2. Selection is Also Seasonal
Sure, you may be able to find better prices by waiting until the tail end of the year (or start of the new year) but as prices drop, so does the selection. What's more important, a few thousand dollars (potentially, that is) or finding a home that is perfect for you? Now thankfully, new residential construction is growing strong in Winnipeg, with both new condos and single detached family homes popping up with each growing community. That will help keep inventory strong for those of you who choose to wait. That being said, buying a home is one of the most important decisions you will ever make, and for first time buyers, there's a good chance that you'll be living within it for quite some time before you even consider a second home mortgage. Don't you want it to be in a place that you carefully selected, and not settled for?
Again, there can be value in following the seasonal pricing trends addressed in item #1 above, but if you plan on doing so, take a good hard look in the autumn, when the prices may cool, but before your choices become too narrow.
3. Mortgage Rates Not So Seasonal
Historically, mortgage rates move slowly and the percentage change during the course of the year will be small. Rates can change for somewhat dramatically of course, but it tends to be because of market factors, and not seasonality. That being said, we do see some movement when it comes to big banks. For instance, there's what we call a 'battle of the bank rates' and that can heat up with the onset of the spring mortgage season, the most popular time for housing activity. By lowering the rates on five-year fixed mortgages, Canada’s big lenders hope to attract first-time home buyers. But once again, this is big bank marketing. When a first-time home buyer such as yourself works with an independant mortage broker, you will gain far better and more flexible rates, ones that are not published in the big bank marketing mix. In summation, when you use a mortgage broker, you won't have to worry about seasonality.
4. The Competition
There are many other home buyers out there looking for a home that very similar to what you want, and within the same budget. This is your competition. Generally speaking, competition is at its greatest in the spring, when housing activity is positively buzzing. In theory, the more people there are looking at available homes near you, the more you might end up paying for the same home at another time of the year. But then, if you wait, those interested in that same home may scoop it up from under you. There is certainly a catch to waiting out the seasons, isn't there?
5. The Best Time, is the Time That's Right for You
The great thing (one of many) about Winnipeg, is that we're somewhat isolated from Canada's typical real estate trends. And keep in mind that for a first-time home buyer, data shows that money goes further in Winnipeg than most other major Canadian cities. Yes, there will always be some seasonal elements at play, but the opportunity cost of waiting too long can be too great. In the end, the best time of the year for you to buy a home in Winnipeg is the best time for you. If you have your eye on a home, or even a general community, start the process now. And that begins, by contacting a mortgage broker than will patiently stand by your side through the entire process. Contact me at 1-204-290-9950 and let's begin the exciting journey together.