What does Canada’s housing market have in store for 2024? – Calgary Herald

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If you’re wondering about what might be in store for 2024’s housing market in Canada, have no fear. Ratehub.ca’s co-chief executive officer James Laird has offered up eight predictions for Canada’s housing and mortgage markets for the year ahead.

Buy/sell, rent/lease residential &
commercials real estate properties.

1. The Bank of Canada will keep its overnight rate at five per cent for the first six months of the year, and then start cutting rates between 50 and 100 basis points for the remainder of 2024.

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2. Fixed mortgage rates will decrease gradually throughout the year as bond yields fall in anticipation of rate cuts and may continue to fall as central banks actually make them.

3. We’ve reached the peak for the stress test for borrowers seeking to purchase a home. Currently, these buyers must qualify at their offered rate plus two percentage points. But don’t expect mortgage rates to go low enough to have the stress test back at 5.25 per cent, the Bank of Canada benchmark, that we saw amid ultra-low borrowing costs.

4. Variable rates have been shunned for the last 18 months amid rising rates, but anticipating falling interest rates, more borrowers will choose variables in 2024.

5. Real estate prices will rise modestly driven by lower interest rates and high migration, but a slowing economy will damper growth.

6. With the feds planning to bring in 485,000 newcomers this year, expect the market to be driven by these new Canadians.

7. Don’t expect Canada Mortgage and Housing Corp. insurance premiums to come down or for the purchase price limit of $1 million to increase even though the Liberals had made election promises in 2021 on both fronts.

8. Renewing at much higher rates for mortgages will put pressure on many households, but most will manage, nonetheless. Defaults are likely to rise, but they would still be within historical averages.

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