It isn’t surprising that home buyers are wondering “if 2022’s the right time to buy a new home?” This seems to be the question many are asking, especially when we’re still recovering from the impacts of COVID-19.
But wait, there’s good news. Fortunately, after reaching the buying frenzy early last year, the housing market’s forecasted to return to pre-pandemic levels. Home prices aren’t expected to drop drastically and there’s projected to be a larger inventory. With that, expect many options for potential prospective home buyers in search of their dream home.
Tides may indeed be in favour of home buyers this year, but it won’t be a walk in the park either. Despite the potential challenges in the home buying process, there are major factors that reflect why it’s a smart move to buy a home this year.
4 Reasons Why 2022’s the Perfect to Buy a Home
1. No more bidding wars
With the housing demand starting to fade after it reached its peak during the height of the pandemic, market prices are expected to cool down. Moreover, home buyers have been faced with bidding wars as Canadian mortgage rates have been at historic lows, creating a red-hot housing market. With mortgage rates expected to be on the rise this year, it’s expected to cool down the market as the cost of borrowing rises.
2. Rent prices to increase
Yes, it’s true that owning a home comes with a price, but rent prices are surging as well. Choosing to rent over buying is like paying for a mortgage. According to realtor.com, rental prices in 44 out of 50 countries have already surpassed pre-pandemic levels. The median rental price nationwide has reached $1,575 – an all time high as of June, which is about 8% higher as compared to the same month last year. Just bear in mind that this doesn’t necessarily mean that prices in the housing market will spike due to low supply. After all, renting is not always the best option to escape increasing home prices.
Another advantage of choosing home ownership over a rental property is that your mortgage payment can remain consistent over an extended period of time, which is typically much longer than renting.
3. Unique local markets
Local markets don’t follow the national trends since they’ve got their own opportunities and challenges when it comes to investment and development projects. For instance, rural areas are in-demand because home buyers are looking to relocate outside crowded cities and to larger spaces that are more conducive for a work-from-home set up.
A particular example’s Vancouver, which for 3 consecutive years is Canada’s top market to watch. The city’s robust immigration activity and abundant capital provides a strong economic outlook. Another example is Ottawa, whose housing market remains stable. There, remote working set ups continue to open up more opportunities for people who want to come from more expensive regions.
4. Additional properties on the way
The shortage in housing has made the real estate market very competitive, but as new construction projects are underway, experts believe this will help alleviate the problem as additional supply is added. After the prolonged home buying frenzy in 2020 and 2021, the housing demand’s expected to fade significantly. This means that you’ll have more homes to choose from, which will contribute to stabilizing prices.
Prepare Your Finances
If you’re still uncertain about when you’re supposed to buy a home, don’t hesitate to consult a trustworthy mortgage broker who’ll be able to prepare and guide you throughout the home buying process.
Based just outside the Greater Toronto Area, Daisy Raouph is a mortgage broker and financial security advisor equipped with over 30 years of experience in mortgage and financial services. Consult Daisy today.