Fellow Windsor homebuyers, homeowners, and investors, On October 25, 2023, the Bank of Canada made a big announcement which has most people talking, with mostly a more optimistic outlook than just a short while ago. Their decision to pause rates until further notice will have an impact on both the Windsor Real Estate Market and Canada’s Real Estate Market as a whole. In this blog, we’re going to break down the decision and what it means for anyone looking at buying or selling within the next couple months or even a year down the road.
The Bank’s Essential Role:
First things first, let’s talk about the Bank of Canada, what their main role is when making these decisions, and that logic they take into consideration when making their rate decisions, which directly affects mortgage rates offered by banks and other financial institutions across the country.
The October 25th Decision
Here are the 3 most important factors when the Bank of Canada decides to increase, pause, or lower rates:
What We’ve Noticed Regarding Inflation
According to The Bank of Canada, they still have a long way to go in terms of truly getting inflation under control but there are key signs showing that there is slight progress being made. Just for perspective, one year ago (Oct 2022), inflation was at a rate of 6.9% and aggressively slowed until June 2023, with a rate of 2.8% and slowly started to climb which led to their decision of raising rates again in September, but now it seems like that trend has faded and even though it’s too early to tell, inflation does seem to be on its way down once again which likely led to their decision of pausing rates. The bank has taken a very pragmatic approach with their main goal of not cutting rates too soon which could also be counterproductive in the bigger picture.
source: tradingeconomics.com
With some optimistic news from Tiff Macklem, the CEO of the BOC, he has stated that inflation does not have to be at the 2% target level for the bank to consider lowering rates, it just needs to be “on a clear path” before they start to act.
What This Means for Buyers and Sellers?
While there may be a lot of uncertainty regarding the Canadian Real Estate Market and the Global Economy, the main thing you should ask yourself is “what are my goals with the purchase of this home and how long do I intend to keep this property/how long do I intend to live here?”. If your concern for putting your purchase or sale of your home on hold has been interest rates or housing prices fluctuating, always understand that overall, it is better to lock in your home “at a deal” when rates are a little higher rather than buying a home for a much higher price when rates eventually do come down, much like the craziness of the Windsor Real Estate Market experienced from 2020 until Spring 2023. This will give you more certainty in your affordability of future payments along with a better opportunity of you building equity which allows for an easier time in terms future moves (whether up or down), selling the property down the road, and even providing a stable financial future.
Conclusion and Closing Thoughts
In the grand scheme of things, rates will always rise and fall, and the opposite is usually true when it comes to Windsor Real Estate Prices. When rates rise, home values decrease. When rates fall, home values increase. It’s all about your personal goals when buying or selling your home but you shouldn’t put your real estate goals on pause as selling or buying in this market is perfectly okay to do either or.
We hope you find the We Sell Windsor Team’s insights in this blog valuable and should you have any questions about this current Windsor Real Estate Market, you can fill out the contact form below or you’re more than welcome to call/text us at 519-300-7093 and Andrew and Daniel would be happy to help you! Happy House Hunting!🏡😊