Bank of Canada raises rate again to 4.25% — but opens door to staying there

 

Central bank has raised policy rate 7 times this year in battle against inflation

The Bank of Canada raised its benchmark interest rate by 50 basis points, to 4.25 per cent.

The move was widely expected by economists, who were anticipating a rate hike of either 25 or 50 points.

Canada's central bank has raised its rate seven times this year in its fight to wrestle inflation into submission. In the process, the bank has taken its rate from 0.25 per cent to 4.25 per cent. 

That's had a huge impact on the rates that Canadian consumers and businesses get from their banks on things like savings accounts and mortgages.

In previous rate hikes, the bank made it clear that it would continue to raise its trend-setting rate until inflation came back to within the range of up to three per cent that it targets. As recently as October, the bank was saying (new window) it "expects that rates will have to go even higher.

The month before, they said (new window) they still judge that rates would have to go higher, after raising by 75 points.

But Wednesday's statement accompanying the rate decision was a clear departure from that tone, as the language shifted to a more neutral, wait-and-see approach.

The bank and its policy makers will be considering whether or not the rate has to go higher in order to bring supply and demand back into balance and return inflation to target, the bank said Wednesday (new window).

For economist Royce Mendes at Desjardins, that's a clear pivot. Upcoming readings on the labour market, inflation and the central bank's own surveys will dictate whether there's more to come, he said. We now expect central bankers to officially communicate a pause at their January announcement, when they will have a fresh set of forecasts in hand.

Stopping the barrage of rate hikes is long overdue for a family who bought a home in Mississauga, Ont., during the pandemic, a decision they say has since come to regret because of the rapid escalation in her mortgage costs.

If they keep increasing the interest rate at this rate, I don't know how we are going to afford [our mortage] bill, they told CBC News in an interview.

On the advice of her mortgage broker and others, she opted for a variable rate loan. 

Skyrocketing payments

Their initial rate was 1.92 per cent, which resulted in a monthly payment well within their family budget. But rates have skyrocketed to more than five per cent since then, causing her mortgage payment to balloon to the point where it gobbles up every spare cent the family has, they said — and then some. 

Their kids don't have any extracurriculars because they can't afford it, they said. Every single penny is going toward the mortgage.

They bristle at suggestions that families can beat inflation by cutting back on expenses, such as the recent quip by federal Finance Minister Chrystia Freeland that families should consider cancelling their subscriptions to Disney+ (new window).

They already don't have one of those things, they say. And even if we had those, how would getting rid of $30 make up for $1,000 of an escalation of an interest rate?

While they are glad to have a home for her children, they are angry that the bank seems committed to raising rates and punishing families like theirs, despite the bank's infamous 2020 pledge (new window) that interest rates are going to be low for a long time.

We should punch ourselves on that decision, they say. Why did we listen to all these people?

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Source:  CBC

B.C. property assessments higher, but market has changed: assessor

 

British Columbia's property assessment agency is warning homeowners that figures released next month estimating the value of their home will likely be higher than the current market price.

BC Assessment says in a statement that most owners can expect to see a five to 15 per cent rise in values when notices are issued Jan. 3.

However, it says those figures are based on the real estate market as of July 1, 2022, and conditions have changed.

Since then, interest rates have continued to rise while overall sales volumes have declined.

The valuation is used to assess local property taxes, and BC Assessment says an added tax burden would only come for owners if the value of their property increased above the average for that community.

The 2023 property assessments will be posted online at bcassessment.ca, along with regional news releases with detailed value changes by community, lists of top-valued homes and other market movement trends.

"Since July 1, we know that the real estate market has changed as interest rates continue to rise and overall sales volume has declined," assessor Bryan Murao says in the statement.

"As a result, your next property assessment will likely be higher than what the current market value might be, but that will be the same for everyone."

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Source:  RE/MAX

5 Questions to Ask a Condo Board Before Buying

 

Doing your due diligence before buying a condo is of the utmost importance. Potential questions include:

• What are the service terms for board members?
• Does the condo board have a reserve fund and how much money is in it?
• Does the condo have any upcoming major repairs?
• Are water, electricity or heating included?
• Is maintenance of common areas (garbage pickup, snow removal, etc.) covered by condo fees?

They’re all questions you’ll want answers to before you decide to put in an offer.

Whether you live in a big city full of condos like Toronto, Ontario, or a smaller town like Canmore, Alberta, condos are often seen as a first step in homeownership for young adults. They’re also popular among seniors looking for low-maintenance spaces, and those who want the perks of amenities with hassle-free living.

So, what should you be asking before purchasing a condo?

 1. Can I see the status certificate?

Jesse Melo, a REALTOR® in Hamilton, and salesperson with the Golfi Team – ReMax Escarpment, says in his current real estate climate, there has been a slight uptick in people looking for condos because the listing price can be more affordable. He says reviewing the status certificate before finalizing the purchase of a condo is a must.

It offers a financial and structural snapshot of the building and the corporation. The certificate can tell you if the building has a healthy reserve fund for maintenance and repairs, as well as essential information regarding whether the current owners owe on condo fees or how much the condo fees have risen year over year. Early in the purchasing process, be sure to get your hands on this essential document and have it reviewed by your REALTOR® and a lawyer.

2. Have there been any special assessments on the building?

A special assessment is when a condo corporation cannot pay for a major unexpected repair or expense from the existing reserve fund. Each unit is then expected to pay an extra charge on top of monthly maintenance fees in order to complete the repair or cover the costs.

“When reviewing the condo status certificate, it’s important to make sure the corporation’s reserve fund is at a stable and healthy level,” Melo says. “This could indicate whether the likelihood of a special assessment in the future is low.”

Be on the lookout for any past special assessments and ask the board of directors or property management about any long-term future repairs or maintenance. Be sure to check on the status of snow maintenance, paving, landscaping, plumbing, wiring, pest control, and insurance. Before making a purchase, you want to make sure your condo is in sound structural and financial shape.

3. What is your policy on pets?

Melo says pets are a big topic for condo boards. Condos can have bylaws and policies that govern what kind, the number, and size of pets you can have in your home. Some condos even have bylaws requiring your pet to be approved by the board of directors. If you have a pet, either prior to putting in or before finalizing an offer, it might be worth submitting a pet application to the condo board for approval. Also, keep in mind your furry pal may not be allowed in common areas around your building like the lawn or courtyard, so take a look for close-by public parks if these aren’t options. Lastly, always get your pet approval in writing in case bylaws change down the road.

4.) What amenities are available?

Go and check out the amenities during your condo showing! Visit the gym, sauna, outdoor area, party room, and pool if your building is equipped with any or all of these. Taking a look around will help you determine if management has been staying on top of maintenance.

“The more amenities a building has, the higher the reserve fund should be,” Melo suggests. This is so they can cover the cost of maintaining them all. Moreover, “the more amenities your condo has, the higher your condo fees could be, so you really have to look at what you will be paying for and consider if it is worth it”.

Ask about scheduled maintenance, too. For example, ask how frequently the pool is closed for cleaning or seasonally. You should also ask about who can use the amenities (are guests able to use the gym?). It’s all well and good for your condo building to have a pool, but if it’s only available a few months out of the year, it may not be as great a benefit as you think.

5.) Can you tell me about the board of directors?

A condo board of directors is responsible for the building’s physical and financial well-being. They make all of the major decisions and uphold the condo’s by-laws and rules. A board is usually elected by owners, and can be made up of owners and, in some cases, tenants. Ask your board for a copy of the condo bylaws, as well as if there are any grandfather clauses in place. It also wouldn’t hurt to speak with the chair or sit in on a board meeting (if possible) to get a feel for the condo corporation’s culture.

Owning a condo is different from owning a single-family or townhome, as there are a lot more hands involved with the daily maintenance and running of the building. However, they can be a great investment, are typically closer to city centres, and can offer great amenities.

When searching for a condo, working with a REALTOR® has many benefits as they can provide you with market information, help you navigate all of your questions and ensure you’re well-informed to find a condo that’s the right fit for you and your future.

Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

 Source:  Realtor.ca

Home Renovations That Could Be Worth Doing Before Selling

 

When the time comes to sell your home, an obvious question arises—should I do renovations before I sell? While on the surface it may seem like renos could increase the value of your property, there are a handful of factors to consider before jumping in.

First, find and choose a realtor for guidance on how the market is performing in your area. Next up, decide on your target market. Are you looking for a buyer who wants a move-in ready place? Or someone searching for a fixer upper? What’s your time frame to sell? These questions will help determine the scale and size of any potential renovation.

Anthony Lance, realtor and sales representative with Right at Home Realty Inc. in Toronto, Ontario, says, “whether you’d like to sell your home with small upgrades or larger ones, there are specific changes that can help.”

Kitchen and bathroom

When it comes to large renovations, Lance suggests putting your money in areas like the kitchen and bathroom.

The kitchen is the heart of the home and future buyers are attracted to a space they could see themselves in. However, the cost and time required to remodel a kitchen can quickly add up with new flooring, countertops, cabinets, and appliances. To keep costs down, consider do-it-yourself projects like painting the cabinets, replacing the lights, and refreshing the backsplash.

A bathroom remodel is also typically one of the higher return projects you can do. For larger renos, consider updating worn-out items, replacing flooring, and purchasing quality finishes. Some easier changes include repainting the vanity, switching out the fixtures, and brightening up your grout.

“When a buyer comes in and sees a nice bathroom and kitchen, it’s a relief,” says Lance, adding “these are intimate areas where people spend a lot of time and having them already done can be a major win.”

HVAC, roof, and windows

Lance also says “people want to know the Heating, Ventilation, and Air Conditioning (HVAC), roof, and windows have been taken care of as a buyer is going to be concerned with what might cost them more down the road.”

When it comes to your roof ask yourself ‘what’s the damage?’ both financially and foundationally.

Like the roof, when thinking about windows determine if a repair will suffice. Windows can make a big impact aesthetically and to the efficiency of your home, including its heating and cooling costs.

General aesthetics

While bigger renos may help increase the value of your home, they could also open up a Pandora’s box, so when planning for renos, consider if smaller changes may fit the bill.

“A fresh coat of paint indoors and outdoors make a home look larger and well maintained. Also consider painting the exterior, especially the front door,” says Lance. “Little things like changing the doorknobs and ensuring the insides of cabinets and closets are in good shape can also help to draw in that detail-oriented buyer.”

Although cleaning isn’t a renovation, a good deep clean of your home is a great way to show off its features. Moreover, “fresh flowers, green grass, mulch in the garden and potted plants go a long way,” says Lance.

If you’re in a condo, give your windows and balcony a good wash and accentuate the area with bright plants and balcony lights. 

Remodeling your home before selling is no small decision. If you have time, a clear budget, and want to attract a move-in-ready buyer, consider taking on larger renovations like the bathrooms, kitchen, or mechanical systems. Or, if your property is already in tip-top shape, consider some paint, a professional home stager, and a proper clean.

There are many paths you can take when thinking of renovating your home before selling, and your REALTOR® can help identify the one that will help in your local market.

Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

Source:  Realtor.ca  

Assessment shock: Which property values in Metro Vancouver and B.C. will be most out of whack?

 

Those assessment notices coming in January will reflect property values on July 1, 2022, when the real estate market was hot

B.C. Assessment has advised homeowners that the value of their property as listed early in the new year will likely be very different from the reality of the current housing market.

That’s because January’s annual assessments are based on market values on July 1, 2022, a time when the British Columbia real estate market was hot. Now, with sales volumes and prices slumping and interest rates on a steady climb, the real value of single-family houses, townhouses, condos and apartments is dropping — in many cases by a lot.

Jeff Tisdale, the CEO of Landcor Data Corporation, says sales data shows the B.C. real estate market hit a “consensus peak” in March 2022 and has been sliding — both in number of sales and prices — since the assessments were done in July. His firm ran some data on how much values have changed from that March peak to now in Metro Vancouver and B.C. municipalities, and in many places the drops were significant.

For instance, the median sale price for a detached home in Surrey back in March was $1.83 million. Now? $1.45 million, a drop of just over 20 per cent. Single-family homes in Vancouver dipped from $2.34 million to just over $2 million, a decrease of nearly 14 per cent.

Other cities with March-to-December drops of roughly 20 per cent for detached homes include Burnaby, New Westminster, Maple Ridge, Delta, Langley City, Abbotsford and Chilliwack.

The average drop for detached homes across the province over those nine months was 24 per cent, with a handful of smaller, more rural communities on Vancouver Island and in the B.C. Interior losing a third or more of their properties’ values.

A few Lower Mainland communities have fared better. Detached homes in Richmond dipped only five per cent ($2 million median price), Burnaby dropped just under six per cent ($1.9 million) and Coquitlam eased just under five per cent to $1.66 million.

The drops haven’t been precipitous for all communities and housing types. Condominiums and apartments have only slumped a bit, and are unchanged in the city of Vancouver proper. The average drop for condos across B.C. was just over eight per cent, and about 11 per cent for attached homes (townhouses).

Even among detached homes, there are outliers. Pricey West Vancouver has continued to climb, with the median house value in March of $2.85 million leaping to $3.87 million today, an increase of $1 million. Single-family homes in Kelowna are up 14 per cent to just over $1.3 million.

Landcor uses B.C. Assessment data to do these kinds of reports for banks, credit unions, appraisers and other institutions that need to know where the market stands in making decisions on mortgages, interest rates and valuations. While the gap between assessed and real value can be a shock, it isn’t directly linked to what property owners pay in taxes.

That’s because a community’s property values tend to go up and down in lock-step, explains Tisdale, and municipal mill rates are adjusted as values rise or fall so tax revenues remain consistent despite the vicissitudes of volatile real estate markets.

Still, Tisdale says there has been discussion around making assessments more reflective of real-time data. He says he recently talked to colleagues about “leveraging big data and artificial intelligence to make market adjustments” after July 1, so those January assessment notices are more in keeping with up-to-the-moment property values.

For now, though, homeowners are going to have to take next month’s assessments with a grain of salt. In most cases, it will misrepresent what the home would really sell for in today’s market — that is, if it sells, in a much slower sales environment.

The silver lining is that your neighbours are all going through the same assessment shock, and it’s not likely to have a major effect on your property taxes come 2023.

Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

Source:  Vancouver Sun

Home sale and listing activity continue trending below long-term averages in November

 

While typically a quiet month of market activity based on seasonal patterns, November home sale and listing totals lagged below the region’s long-term averages.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,614 in November 2022, a 52.9 per cent decrease from the 3,428 sales recorded in November 2021, and a 15.2 per cent decrease from the 1,903 homes sold in October 2022.

Last month’s sales were 36.9 per cent below the 10-year November sales average.

“With the most recent core inflation metrics showing a stubborn reluctance to respond significantly to the furious pace of rate increases, the Bank of Canada may choose to act more forcefully to bring inflation back toward target levels.” Andrew Lis, REBGV’s director, economics and data analytics said. “While it’s always difficult to predict what the bank will do with certainty, this persistent inflationary backdrop sets up the December 6 rate announcement to be yet another increase, making holiday-season home sales something many people may end up foregoing this year.”

There were 3,055 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2022. This represents a 22.9 per cent decrease compared to the 3,964 homes listed in November 2021 and a 24.2 per cent decrease compared to October 2022 when sellers listed 4,033 homes.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,179, a 28.5 per cent increase compared to November 2021 (7,144) and a 6.8 per cent decrease compared to October 2022 (9,852).

“Heading into 2023, the market continues the trend of shifting toward historical averages and typical seasonal norms,” Lis said. “Whether these trends continue will depend on looming economic factors and forthcoming housing policy measures on the horizon, which hold the potential to reignite uncertainty in our market.

“With that said, from a long-term structural standpoint, the current pace of listings and available inventory remain relatively tight when considered against a backdrop of continued in-migration to the province. With the recently announced increase in federal immigration targets, the state of available supply in our market remains one demand surge away from renewed price escalation, despite the inflationary environment and elevated mortgage rates.”

For all property types, the sales-to-active listings ratio for November 2022 is 17.6 per cent. By property type, the ratio is 13.2 per cent for detached homes, 19.7 per cent for townhomes, and 20.8 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,131,600. This represents a 0.6 per cent decrease over November 2021, a 10.2 per cent decrease over the last six months, and a 1.5 per cent decrease compared to October 2022.

Sales of detached homes in November 2022 reached 486, a 50.8 per cent decrease from the 987 detached sales recorded in November 2021. The benchmark price for detached properties is $1,856,800. This represents a 1.7 per cent decrease from November 2021 and a 1.9 per cent decrease compared to October 2022.

Sales of apartment homes reached 847 in November 2022, a 53.7 per cent decrease compared to the 1,828 sales in November 2021. The benchmark price of an apartment property is $720,500. This represents a 3.5 per cent increase from November 2021 and a 0.9 per cent decrease compared to October 2022.

Attached home sales in November 2022 totalled 281, a 54.2 per cent decrease compared to the 613 sales in November 2021. The benchmark price of an attached unit is $1,027,900. This represents a 2.7 per cent increase from November 2021 and a 1.5 per cent decrease compared to October 2022.

Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

Source:  REBGV

2023: The Year of the Homebuyer? Our Bold Predictions on Home Prices, Mortgage Rates, and more

 

It’s safe to say we’ve never encountered a housing market nearly as unpredictable as the one we’re in right now. After months of navigating wild fluctuations, homebuyers, sellers, owners, and renters are now desperately trying to read the tea leaves to figure out where real estate prices, inventories, sales, and mortgage rates are going in the coming year.

And just in time, Realtor.com® is here to help them all figure it out with our annual housing forecast.

The bottom line: Homebuyers and renters hoping for some financial relief in 2023 will likely be disappointed. But they won’t get whiplash either. The dramatic swings and wild gyrations in the housing market are expected to taper off as the real estate ecosystem continues to slow.

While the Realtor.com 2023 forecast anticipates home and rental prices will keep climbing next year, the increases will be much more modest than the huge surges seen earlier this year. Mortgage interest rates, which have become the bane of many first-time and other buyers who can’t pay all in cash, will remain high. But they aren’t expected to substantially rise again.

Sales are expected to continue falling as buyers simply can’t afford the onerous combination of towering home prices and high mortgage rates. Home and rental prices have been falling from their peaks over the summer, but they’re still rising year over year.

“It’s going to be a tough year for homebuyers, home sellers, and the overall housing market,” says Realtor.com Chief Economist Danielle Hale. But “we’re going to take some steps toward a better balance between buyers and sellers.”

One bright spot for buyers will be the number of homes for sale, which has been hovering near crisis level and is finally expected to rise. But will that be enough to bring buyers back into the market?

This is what homebuyers, home sellers, and renters can expect in the new year.

Home prices won’t drop, defying expectations

Simply put, higher mortgages have utterly bludgeoned the housing market.

Buyers, particularly first-timers, can’t afford to offer as much for a home when their monthly payments are inflated by higher interest rates. But home prices next year aren’t expected to crash.

Nationally, Realtor.com predicts they’ll rise 5.4% year over year in 2023. That’s still going to hurt—but not as much as the double-digit increases seen during the COVID-19 pandemic.

Median monthly mortgage payments are expected to be about 28% larger than this year and twice as large as they were in 2021. To put into perspective how tapped-out homebuyers are, monthly mortgage payments were about three-quarters larger in late October than they were in 2021. (The latter figure depended on that week’s average mortgage rates.)

“Most other forecasts call for price declines,” says Hale. “But that’s not what we’re expecting.”

Sellers don’t want to lower their asking prices too much after watching their neighbors make bank just a few months ago. And there are still too many people who want homes than there are available residences to go around.

“What buyers can afford to pay with mortgage rates as high as they are may not match what sellers are looking for,” says Hale.

Home price growth will continue to slow and could even dip a little over the next few years. Realtor.com anticipates the correction in the market could last through 2025.

Renters, many of whom are already suffering from sticker shock, won’t fare any better. Nationally, rents are expected to rise by 6.3% year over year in 2023.  While painful, it’s also far below the double-digit jumps experienced earlier this year.

“Landlords are aware that demand is not as unlimited as it was at the beginning of the year,” says Hale.

The exceptions are the big, expensive cities where rents seemingly fell off a cliff during the pandemic as renters fled to quieter, less-populated communities. Landlords slashed their asking prices, then jacked them back up and then some when tenants returned seeking rentals. There might be more room for rents to grow in 2023 in the urban areas than in the suburbs.

Mortgage rates will stay frustratingly high

Soaring mortgage rates have ground the housing market to a halt, forcing many would-be buyers to stay put or rent for longer than they had anticipated. Many plan to jump back into the homebuying fray once rates come down. But they may have to wait for longer than they had hoped.

Realtor.com predicts that mortgage rates will average 7.4% in 2023, trickling down to 7.1% by year’s end.

Rates are expected to remain high thanks to the Federal Reserve. As it hiked up its own interest rates to slow inflation, mortgage rates have followed a similar, upward trajectory. And the Fed seems committed to continuing to raise rates.

While the Fed’s actions are only one component that goes into mortgage rates, it’s emerged as a significant one this year. That’s expected to keep rates around 7%, where they were a few weeks ago, before falling to the mid-6% range after inflation showed signs of cooling.

“Even though we have seen some progress on inflation, it’s three-and-a-half to four times higher than the Fed would like it to be,” says Hale. “That means there’s more work for the Fed to do.”

The number of homes for sale will surge…

The silver lining for buyers, long frustrated by the anemic number of choices out there for them, is that more homes will be available for sale. The inventory of properties is expected to spike by 22.8%. (This includes only existing homes, which are previously lived-in residences, and excludes new construction.)

However, the surge won’t be due to more sellers putting their homes up for sale. Homes are expected to sit on the market for longer, as there will be fewer buyers who can afford to purchase property with mortgage rates so high. Those homes will accrue, which is why inventory will rise.

“It’s definitely needed,” says Hale of that increase in real estate on the market. “Buyers are more cautious in an environment where costs are higher for them.”

While those extra homes are sorely needed, they’re still far below what they are in a more normal housing market. The number of existing homes forecasted to be for sale in 2023 will still be 15% less than in 2019—when there was already a national housing shortage.

Despite the scarcity, builders aren’t expected to put up as many homes in 2023. Their pool of customers is drying up because buyers can’t afford the homes at higher mortgage rates. New construction is anticipated to fall about 5.4% year over year.

“They can’t build them at prices that buyers can afford,” says Hale. Land, materials, and labor costs are simply too high. “They’re pulling back on permitting and the housing units they are starting.”

… while the number of home sales will fall

The number of home sales is expected to keep dropping as buyers keep getting priced out of the market. Sales are anticipated to fall 13.8% year over year in 2022 and then keep decreasing by 14.1% in 2023. There will be just 4.53 million sales next year, the fewest transactions since the depths of the Great Recession in 2012.

(These predictions include only existing homes and exclude new construction.)

Realtor.com expects the usually busy spring season will be quieter than normal in 2023 as buyers struggle against the higher prices and mortgage rates. Renters are already stretched thin contending with higher and rising rents along with inflation, making it difficult to save up for a down payment on a home of their own.

Many homeowners will simply stay put and weather the storm in the housing market. Plenty are locked into mortgages with very low rates. That will make them think twice before selling their property and purchasing a new one with a mortgage rate that will be significantly higher. Even if they’re downsizing into a much smaller home, it could cost them significantly more to do so.

The homeownership rate in America is expected to basically hold steady, ticking down to 65.7% in 2023 from 65.8% in 2022.

Those who do sell will still do well. The average homeowner will see their equity rise by $25,650 in 2023. Those in more affordable parts of the country could see even higher gains as people from higher-priced markets relocate to cheaper ones, bidding up prices.

A severe recession could upend these predictions

While Realtor.com doesn’t expect the nation will succumb to a major recession, economists aren’t ruling it out entirely. Typically during a downturn, the Fed cuts its interest rates. That could cause mortgage rates, prices, and home sales to fall.

While some buyers are likely to jump into the market as soon as rates go down, others won’t want to make what is often the largest purchase of their lives during a downturn when their jobs might not be stable. And some folks will become unemployed or lose overtime and side gigs, making homeownership unaffordable.

“If prices decline, it might bring buyers back,” says Hale. But “a more severe recession would mean fewer sales.”

Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

Source: Realtor.com