A good example of this point is the housing market of the 1950's, the market was booming, housing prices were increasing, things were great and then in the late 50's the unemployment rate went up and the market crashed. Once again, in the late 80's we saw a thriving housing market in Canada and then the interest rates skyrocketed and people lost their houses, this situation affected the entire housing market in Canada and house prices took a dive.
Some outside force usually spark s the market depreciating. In the fifties, it was the growing unemployment rate, in the eighties it was the huge increase in interest rates, and now the crisis in the US, which was caused by poor lending practices in the mortgage industry. What you should remember is that nobody wants a poor housing market in Canada so the government and the Bank of Canada will do everything in their power to fix the problem.
In fact, the Bank of Canada recently announced that it has vigorously cut its overnight lending rate by seventy-five basis points. This cut now puts the overnight rate at its lowest point in 50 years. The last time the rate was so low was in 1958 when again, in response to the housing crisis, the rate was cut to prompt people into purchasing a home in Canada.
All of this is good news for homebuyers and sellers, on the one hand if you are purchasing a home in Canada you benefit from cheaper rates and less expensive houses, and on the others hand the sellers benefit from more buyers. It is also import ant for sellers to remember that even if you are selling your home in a down market it is all relative because you are also purchasing a home in that same market. The same thing applies to selling in a booming house market, yes, you benefit by getting a higher price for your home, but you still have to buy another house so you are purchasing a home in the same market at the increased prices.
We've already seen the credit crunch here in Canada slacken a little bit. The worse of it was over almost as quickly as it began, and it's almost business as usual again in the mortgage industry. In the mortgage industry, we're seeing loads of competition from lenders with rate specials, and lots of availability of cash for good quality borrowers and homes. If you are a first time homebuyer now is the time you will benefit from cheap rates and less expensive houses, giving you the opportunity to start build wealth through equity. In addition, if you own your own home now could be a good time for refinancing a mortgage into lower rates or even take advantage of the equity in your home to consolidate debts. After all, there are some fantastic rate specials out there now and why should a first time homebuyer be the only one to benefit.
Therefore, if you are purchasing a home, purchasing a new home, or refinancing a mortgage, don't be afraid of the housing market in Canada the difficulties are normal and if it's down right now it will be up again later.
0 komentarze:
Post a Comment