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The Economy is right For Buying a Home

As you may know, the Canadian economy, for the most part, is influenced by the U.S. economy, which is still struggling, but some sectors are showing some signs of recovery. Recent news that investment guru Warren Buffett felt the U.S. economy was strengthening has increased market activity there in the past week.

For the real estate sector in Canada, the buzz words are

"balanced market", which could easily turn into a buyer's market as interest rates remain low and sellers reduce their asking prices to make the sale. Chris Potter, a tax specialist at PriceWaterhouseCooper writes in a report called Emerging Trends in Real Estate 2011, "Rising interest rates coupled with tight bank requirements and  broader economic concerns tamper down a recent home buying spurt, particularly in Ontario and B.C., where purchasers stepped up activity before the HST went into effect."

 

The market did experience a burst of activity prior to the implementation of the HST. Then, sales slumped over the summer, and while the fall sales came late, they did manage to pick up. In 2011, the Canadian Real Estate Association predicts that the balance between supply and demand will remain stable, which is good news for both buyers and sellers. Sellers can feel confident about price stability and purchasers will feel less pressure to make the quick offer.

A report released in November, 2010 by the Canadian Association of Mortgage Professionals maintains that the residential mortgage market is strong and a vast majority of Canadians could easily afford monthly increases of $300 dollars or more in their monthly payments. As of last August, there was over $1 trillion dollars in outstanding residential mortgage credit in Canada. 

With all that said, timing the market perfectly is difficult.  Usually consumers will take a look at their personal finances and then decide if they can afford to buy a house, or move up. However, Canadian consumers are also paying down their debt before the Bank of Canada starts to push up its interest rate, which will likely happen this spring. So that is good news. And since any rise in interest rates will be modest, purchasing a home will still be affordable, especially for first time homebuyers who will continue to dominate the market.

If you're considering a home purchase, or if you have friends or family who would like to learn more about their options, please consider a MyDaddyHomes mortgage specialist.

Article compliments of Carlo Carpino, a MyDaddyHomes mortgage specialist and contributing writer: You may contact Carlo at: 905-796-6661

 

Published Friday, January 14, 2011 2:00 PM by E S

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