BC Mortgage Update: Where Are We Now?
Needless to say, we experienced some turmoil last year – and like almost every industry, the mortgage market has been affected too; but luckily, in a somewhat unexpected way. Let’s just jump right in and talk about the elephant in the room – COVID-19. Though the pandemic did not collapse the Shuswap real estate market, it did delay it. The housing rush that typically hits the market in the spring, was instead experienced in the summer, and has trended through the fall and winter as well.
So, how are many consumers able to afford a mortgage to purchase a home in Salmon Arm? It’s likely that the Government assistance programs contributed to keeping the economy stronger than it otherwise would have been during the pandemic. As well, the current demographic of homebuyers were not as effected by job loss, as many shifted into a work from home role and eluded being laid off completely.
In addition, thanks to the swift action of the Bank of Canada, and its global counterparts, we were able to avoid a major credit crisis like the one that was seen during the 2010 “flash crash”. Currently, the average Canadian 5-year fixed interest rate has fallen to under 2% - and the Mortgage Rate Forecast report released by the British Columbia Real Estate Association (BCREA) noted that the Bank of Canada has confirmed it has no plans to raise its overnight policy rate from 0.25% until slack in the economy is absorbed and inflation returns to its more sustainable 2% target.
Overall, projections are somewhat difficult to make considering no one knows for sure how long COVID-19 will be affecting the world, or how strong the Canadian economy will be post-COVID. However, in the simulated scenarios BCREA has run, they’re projecting that the earliest the Bank of Canada may begin raising interest rates would most likely be 2023, with a tighter scope of criteria offering late 2022 as an advanced development.
The above insight, coupled with the fact that BC is experiencing a relatively modest increase in average housing prices in comparison to some of Canada’s other key markets, creates a fantastic opportunity for you to secure a mortgage. Let’s connect today - give me a call at 250.804.9874 to see how you can take advantage of some of the lowest mortgage rates BC has ever experienced!