Will Home Prices Continue To Rise In 2024?
With home prices dropping and mortgage rates being projected to take a dip soon, home buyers are considering whether it’s the right time to purchase their dream home. We know it is tempting to wait until a better deal arrives in the market. However, no one can guarantee that home rates will become more affordable in 2024 or that mortgage rates will drop in the upcoming years.
Latest Forecasts for Home Values and Mortgage Rates in 2023 and 2024
Let’s look at the CMHC forecasts for home sales and mortgage rates in the next two years.
The Canada Mortgage and Housing Corporation, a federal crown corporation and housing agency of Canada responsible for providing mortgage loans to potential home buyers, expects 423,000 home sales in 2023. It would be a 15% decline from previous years’ numbers and a 37% reduction compared to the 2021 results.
The home sales numbers are expected to gain momentum with a little over 373,000 home sales in 2024, and finally, returning to the earlier norms of 505,000 unit sales by 2025.
The low supply of residential properties will gradually contribute to affordability. It is a result of ongoing labor shortages, higher project financing expenses because of high interest rates, and a continued increase in construction material costs.
CMHC experts also see that residential property prices will start boosting in 2024, reaching about 928,428 CAD in 2024 and rising to 998,259 CAD in 2025. It will be a result of economic growth and an increase in immigration levels.
CMHC predicts the average 5-year fixed mortgage rate to be 5.7% this year, which is a rise from 2022’s 4.9% and 2021’s 3.3%. The rates are also expected to decline gradually in the upcoming years. In 2024, the home mortgage rates are projected to drop marginally to 5.6% and 5.4% in 2025. Talk to your mortgage agent in Kingston to learn about the current rates in your city and state.
Is it a Good Time to Buy a Home?
The short answer is yes. Now is the right time to invest in a new home because soon the values would surge, especially with the incoming summer season, making it difficult to get a good deal at your preferred budget. Another major reason this is the right time to invest in a new residential property is that mortgage rates are quite steady currently and are even likely to drop.
Economists are expecting Canadian home values to rise 0.5% between January 2023 and January 2024. It is a direct aftereffect of inflation and the pandemic. Due to the spike in residential property rates from 2020 through 2022, resulting from low mortgage percentages. As a result, median sales values will take a minimum of up to 2027 to regain the home value spike of mid-2022.
The CMHC (Canada Mortgage and Housing Corporation) expects home values to reach a bottom in 2023. However, they are not expected to fall below the pre-pandemic rates though. So, due to stable and low first-time home buyer mortgage rates and property values, you should not miss the chance of investing in your dream home now or within the next few months of this year.
It’s good news for (soon-to-be) property owners that home prices will increase in the upcoming months. Besides, mortgage rates have also stabilized a lot after several months, so don’t miss this chance. Take advantage of it by getting a good deal on homes. If you are willing to buy a new property, this is the right time. Book a consultation with Leo Ragusa, Kingston’s best mortgage broker, today.