For the first time in my career I’ve seen banks raise interest rates by incremental amounts for 7 weeks in a row… 7 weeks in a row! Interest rates are an integral part of the home buying and selling process. Daily I get asked about rising rates and how they will impact our local market. There’s no secret the federal government is increasing interest rates to help combat the hot seller’s market across the country.
Winnipeg has always been, and will continue to be somewhat insulated from interest rate hikes effecting our market. With our average sale price right around $450,000, the collective rate hikes will only increase the average monthly mortgage payment by $150/month.
The average home purchaser in Winnipeg can battle these rate increases simply by developing a tighter monthly budget or not purchasing a home up to their max pre-approval amount. In larger cities with much higher average sale prices, the increased monthly mortgage payment will push the average buyer beyond just budget tightening and may even price them right out of the single family market altogether.
While we are starting to see a pricing correction in other major housing markets across Canada, we are going to see more of a pricing plateau here in Winnipeg, not a correction. Our market is simply too affordable for rising interest rates to have a negative impact on our average sale price. Even when the housing bubble ‘burst’ in 2008, Winnipeg still saw its average sale price increase when many cities across North America saw a dip.
So what do you do if you are negatively affected by rising interest rates? What do you do if you’re priced out of buying a single family home? It’s time to climb the property ladder and look for other equity building real estate options. That information and more in our next quarterly update. Or you give me a call or text now. I’d love to help.