Posted On Jan 15, 2024

(First published January 6, 2024)

Now that we’ve officially turned the page on 2023, it’s a good time to pause and consider the major trends that have influenced the real estate and mortgage markets in Canada while also providing a view as to what may lie ahead in 2024.

2023:  A year of resilience under pressure

As we know by now, interest rates falling to historic lows early in the pandemic fuelled an overheated housing market and created inflationary pressures. To combat both, the Bank of Canada began to gradually increase rates starting in March’22 and right up until July’23.   Borrowers, especially those in variable rate mortgage products who missed out on opportunities to lock in their rate, experienced payment shock in 2023.  

Yet the past year in Canada has been marked by significant resilience in various sectors. Canadian mortgage borrowers, in particular, have shown great determination in the face of soaring interest rates, maintaining low delinquency rates. This demonstrates their strong commitment to managing their financial responsibilities, especially regarding mortgage payments.

In terms of bringing inflation under control, Canada has made substantial progress. Inflation rates, which hit a 40-year peak of 8.1% in June, have consistently decreased to 3.1% by November.   Economically, the country has maintained stability. Despite a slowdown in growth in the latter half of the year, there is optimism for a "soft landing" rather than a severe recession, reflecting confidence in the economy's resilience.

The Canadian housing market has also shown unexpected strength. Even with challenges like increasing mortgage rates and reduced sales, the housing prices have not been as negatively affected as anticipated, primarily due to low inventory levels. This resilience in the housing market is a testament to the overall strength and adaptability of Canada's economy and its people.

 

 

Looking ahead to 2024: rate relief on the horizon?

The year 2024 is anticipated to bring relief for Canadians, primarily influenced by the trajectory of inflation. The Bank of Canada is closely monitoring inflation with the goal of returning to its 2% target by 2025. As inflation continues to decline, Canadians can expect more stable prices in housing and everyday goods. Additionally, there is an expectation that the Bank of Canada might reduce interest rates later in the year. While the exact timing and pace of these rate cuts are uncertain, they are likely to be beneficial for new homebuyers and the approximately 60% of mortgage holders who will be renewing their mortgages within the next three years.

 

Be guided to success 2024

As 2024 begins, I am here to offer support in navigating the ever-evolving mortgage landscape. My expertise is readily available for those seeking to delve into real estate ventures, weigh refinancing possibilities, or simply to gain insights into the prevailing market trends. 

Should you be approaching a mortgage renewal this year, I strongly recommend consulting with me before renewing your mortgage with your current lender, to avoid getting locked into an unfairly high rate or one that limits your future opportunities. Renewing a mortgage in a high-rate environment can be challenging, but with the right strategies and a well-thought-out plan, you can still secure favorable terms for your mortgage in Canada in 2024. Whether you opt for a shorter-term mortgage or a variable mortgage, or a hybrid approach, it’s in your best interest to consult with a qualified Mortgage Agent.  Feel free to contact me anytime to evaluate your current financial status or to talk about new possibilities. I'm here to assist you in navigating the changing mortgage landscape.

Looking forward to helping you get a Better Mortgage in 2024!  Ready to get started?  Or just want to connect? 

 

 

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