Interest rates, higher prices, low inventory, sales numbers
Higher interest rates
With interest rates going up, many people thought that home prices would drop. But that hasn’t happened, and the main reason is that there aren’t enough homes for sale.
In Alberta, more people are moving in from other provinces and countries, which is driving up demand. At the same time, many homeowners don’t want to sell because they’d have to take on a new mortgage at a much higher interest rate. This is making them stay in their homes until their current mortgage is done. For those who want to buy a bigger house, it’s even harder. Some might not qualify for a larger mortgage with today’s rates. For example, buying a $400,000 home now would mean higher monthly payments than a couple of years ago.
Interest rates are starting to go down again, which could help a bit. However, even if homeowners decide to sell, they still have to buy another house unless they move away. Plus, lower rates could bring more buyers into the market, making the problem of low inventory even worse.
Market changes
In 2023, many sellers decided to stay in their homes, while buyers rushed to purchase before rates went up. The housing shortage pushed more renters to buy, and the lack of rental units attracted more real estate investors. Now, in 2024, things are changing a bit, but the market probably won’t get much easier to deal with.
Interest rates have hit their peak and then have gone down a few times this year. With rates dropping, we might see more home sales in the next year, but that depends on whether more homes are built.
Builders will likely add more homes to the market, but I expect inventory will remain low for a long time, which will keep prices high.
Check in as often as you can to iOnRealEstate.ca to see what happens in out local market in 2024.
If you’re planning to sell this year here are some helpful tips – https://www.ionrealestate.ca/selling-your-home/
If you’re planning to buy and want to do your best plus save money, click here – https://kingblake.com/buying.html
