Well, that was quite a year!
Unfortunately, not for the better when it comes to interest rates and housing prices. Like all change, it’s not always welcome or for the better however we need to identify both threats to mitigate and opportunities to take advantage of. As your Hamilton Mortgage Broker, I am constantly looking for both to assist my clients.
The Bank of Canada raised the overnight rate eight times during the year resulting in Bank’s Prime rates ending the year at 6.45% and 5-year fixed rates around 5%, or often higher, depending on your financial situation. This was a far cry from Prime of 2.45% and 5-year fixed rates of just over 2.5% available at the beginning of the year.
At the same time, many markets saw price declines of between twelve and twenty percent over the course of the year from the record “all-time” highs seen in February 2022 to the end of the year.
Hopefully, 2023 will see some improvements on both fronts over the course of the year. The Bank of Canada is signalling a pause and hopefully an end to interest rate hikes, bringing Bank Prime rate up by another .25% to 6.70%. An end to increases to the Prime Rate should help reduce a bit of uncertainty in the market. Uncertainty is not our friend, as we get used to the new normal, opportunities will become more apparent. Hopefully, these rate hikes we’ve endured will translate into lower inflation which will allow the Bank of Canada to start reducing rates again. Hopefully later in the year or early 2024. With reduced rates will come increased affordability, opening up the real estate market to more purchasers, especially “first-time” buyers.
There will be opportunities for both buyers and those looking to renew and refinance their mortgages. It has never been more important to rely on your Hamilton Mortgage Broker. With over 30 years of personal industry experience, I can help guide you through the uncertainty, avoid the risks and help you identify and realize the opportunities.