High Borrowing Costs Taking a Toll on Housing Affordability
Sales were down in the Greater Toronto Area in November and selling prices remained flat on a year-over-year basis.
Inflation and elevated borrowing costs have taken their toll
on affordability. This has been no more apparent than in the interest
rate-sensitive housing market. However, it does appear relief is on the
horizon. Bond yields, which underpin fixed rate mortgages have been trending
lower and an increasing number of forecasters are anticipating Bank of Canada
rate cuts in the first half of 2024.
Home prices have adjusted from their peak in response to
higher borrowing costs. This has provided some relief for buyers, from an
affordability perspective.
It’s been a challenging year for homebuyers and sellers, who
have been feeling the effects of a severe housing shortage and the high cost of
living. Historically, real estate has given owners excellent returns and strong
financial security – and that hasn’t changed.
Many thanks for your continued support throughout the year. I
wish you and your loved ones a safe and joyous holiday season. See you in 2024!