Over the last few weeks mortgage lenders have increased fixed term rates by up to 35 basis points and the indications are that further increases will be coming soon. The increase in mortgage rates along with the recent tightening of the mortgage lending rules could result in worsening home affordability. Not only is it now harder to obtain a mortgage approval it will soon cost you more every month. A low rate of 2.49% can still be obtained for a five year fixed term and variables rates can still be offered as low of 2.20%. Don’t expect these rates to last. I encourage mortgage borrowers to review their financial position and take action to refinance before it becomes even more difficult.
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Home prices moderate
Residential home sales for the month of November have decreased nearly 40% versus the same period last year and are almost 10% below the ten year average. It’s not all bad news as the downward pressure is primarily on detached properties. Sales for apartments actually increased in November over the previous month. Demand for apartment and townhomes are higher than detached properties and as a result detached home prices have weakened while attached home prices have remained stable. The softening of the detached prices may begin to stabilize as the inventory levels begin to decrease. A strong marketing strategy and execution is now more important than ever when it comes to selling your home.
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