Sales have returned to above-average levels
If you are a homeowner watching the Real Estate market in the Fraser Valley, you may have noticed that 2019 finished strong after a comparatively lackluster year. Early in the year, we were still undergoing the impact of the stress test that was introduced in 2018, but with steady job growth and a stable economy, sales have returned to above-average levels in our region.
January 2020 was active
January was an active month in the local Real Estate market. I even had multiple offer situations. That said, this might be a good time for homeowners to consider selling because of increasing demand and a limited supply of houses for sale. Some homeowners in our region who were thinking about selling have been waiting for prices to rise a little and that time is now!
Lower Interest Rates
There are a few factors at work that are contributing to the potentially lower interest rates and that will impact the market too:
The current pressure on “bond market yields” is an indicator that the banks will continue on a trend to lower interest rates.
Long term rates will likely come down as the banks look to secure long term mortgage lending, as opposed to short term mortgage lending. (see below) Currently, international concerns regarding the Coronavirus are contributing to this downward trend too.
An interesting note regarding long term mortgages
In the past, long term mortgages have been considered to have very restrictive terms of repayment, so people shy away from them. Legitimate concerns about early payout penalties, large upward interest rate shifts, during the mortgage term have made these unpopular choices for buyers.
Changes to longer-term mortgages
Did you know that after five years in any mortgage term lenders can no longer charge the “interest rate differential penalty”? The maximum penalty is a three-month one-time penalty. This is a great new safeguard should you choose a long term rate. Also, you are still able to “portable” your mortgage to your next home in most cases.
If you want to know more, I can arrange for all your questions to be answered by a trusted mortgage professional.