The national housing market remains steady and strong and is expected to stay on this stable course for the mid-term.
Economic indicators continue to show signs of strength in the Canadian that are tempered primarily by external forces. Household net worth increased by $58 billion in late 2011. The fact that asset values increased by considerably more than household debt, helps to mitigate some of the concern about rising debt levels. Businesses are also feeling stronger, as shown by an expected increase of 8% in private enterprise investment spending. This is a good signal for continued improvements in employment and the economy.
The Bank of Canada has left the interest rate steady, where it has been for the past 18 months. If the external factors, including recovery in the United States and stability in Europe, continue to improve at the current pace, the next rate hike is expected in early 2013. Given that core inflation is rising more than expected, if improvement accelerates in the United States and abroad, that rate hike could be seen sooner.
A well-balanced housing market provides a level playing field with opportunities for both buyers and sellers. Interest rates remain historically low and present buyers with extremely favourable financing. The time to act is now, because as global recovery regains its footing, rates will likely rise to keep inflation in check, resulting in a higher monthly housing payment for home buyers.
Resale housing activity rose 1.4% month-over-month, recouping one-third the monthly decline from December to January. The relatively stable number of sales is a continued sign of strong fundamentals.
The average home price in February stood at $373,749 — up 2% from where it was this time last year. There has been a preference recently for single family homes, which tend to be more expensive, and this has skewed home prices upward. This should have a minimal, if any, effect on buyers and sellers.
The national housing market remained balanced in February. The sales-to-new listings ratio has ranged between 52%–54%, for 9 out of the past 11 months. The overall picture remains balanced and that indicates a greater likelihood of steadiness and stability in the coming months, which is a good sign for the housing market moving forward.
Low interest rates and stabilizing home prices are bringing home ownership within reach for an increasing number of Canadians. When widespread global recovery gains a stronger footing, rates are expected to increase to keep inflation near the 2% target. For now, the low rates offer increased affordability for home buyers.
Home buying is often exciting, but packing up and moving is almost always stressful. Below are a few tips to help make the move a smooth one.