Fall housing market could be ripe for 1st-time buyers. Here’s why
Some long-unaffordable pockets of Canada’s housing market could open up to first-time homebuyers this fall as interest rates decline but experts expect prices will hold relatively flat.
Activity in the Canadian housing market has largely been muted through much of the spring and summer despite the start of rate cuts from the Bank of Canada, which delivered its third consecutive 25-basis-point drop on Wednesday.
Toronto-based realtor Pritesh Parekh tells Global News that while the summer is seasonally a slower time for home sales, he also believes the June and July rate cuts were not enough to change the narrative for buyers still boxed out of the housing market.
Declines in the central bank’s policy rate lower the bar of entry for would-be homebuyers, many of whom have been sidelined as they struggle to qualify for a mortgage to break into the ownership market.
“Now that we’re at the third consecutive rate cut this year alone, I think it’s something where more conversations are going to start for first-time buyers,” he says.
TD Bank economist Rishi Sondhi says that he’s expecting a “fairly healthy sales gain” in the fourth quarter of 2024, thanks in part to lower interest rates.
He notes that activity is still likely to lag behind the pre-pandemic pace as borrowing costs and home values are still elevated.
TD Bank joins other major lenders predicting the Bank of Canada will lower its policy rate to a resting point around 2.5 per cent in 2025.
Parekh notes that with growing confidence of a downward path for interest rates, there’s a tendency for buyers to hold out in hopes of securing the lowest rate or a bigger mortgage.
That could limit the number of buyers flooding back into the market this fall, even as others reach a
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