Mortgage Rate Projections Interest Rate Cuts:
- Fixed Mortgage Rates: The bond yields, which influence fixed mortgage rates, are anticipated to decrease throughout 2024. This suggests that fixed mortgage rates will likely follow a downward trend, although the exact timing and magnitude of these changes remain subject to economic conditions.
- Variable Mortgage Rates: With the projected rate cuts by the Bank of Canada, variable mortgage rates are expected to become a more popular choice among borrowers. These rates are directly affected by the Central Bank’s decisions and are likely to see reductions following the policy rate cuts.
If you have a variable-rate mortgage, or if you’re considering buying an Edmonton home, the anticipated rate cuts could lead to lower interest rates on mortgages. This means your monthly mortgage payments could be reduced, making homeownership more affordable in Alberta. This may also increase buyer interest and competition, so our ongoing advice of buying when the time is right for you is important.
Housing Market Trends Home Price Growth:
Various forecasts suggest a modest increase in national average home prices, with predictions ranging from 0.5% to 5% year-over-year by Q4 2024. This growth reflects a stabilizing market after the rapid changes experienced in recent years. Specific to Edmonton, lower price ranges will favour more competition due to more accessible affordability.
Home Sales Activity:
Throughout Canada, an increase in home resales is expected, with predictions of a rise of around 5.2% in 2024. This increase indicates a recovering market, although it’s important to note that regional variations can significantly affect these numbers. For Edmonton, “the average price for all types of housing is expected to rise 1.2 percent overall” according to the Realtors® Association of Edmonton.
Economic Factors Influencing Mortgage Rates Inflation and Central Bank Policy:
The Central Bank’s efforts to combat inflation have led to the current high interest rates. As inflation is brought under control, the Bank is expected to lower rates to stimulate the economy. This relationship between inflation control and interest rate adjustments is a critical factor in mortgage rate projections.
Bond Market Movements:
The bond market’s expectations play a crucial role in determining fixed mortgage rates. As bond yields drop in anticipation of rate cuts by the Central Bank, fixed mortgage rates are likely to decrease accordingly.
Global Economic Conditions:
The economic environment in the United States and globally can influence Canada’s economic policy decisions, including those related to interest rates. Factors such as U.S. inflation and economic growth will be closely monitored for their potential impact on Canadian mortgage rates.
Housing Demand and Supply Dynamics:
Canada’s growing population, coupled with a relatively static housing supply, suggests continued demand for housing. This demand is likely to support home prices and influence the mortgage market.
In summary, the residential mortgage rate landscape in Canada for 2024 is expected to be characterized by declining interest rates, modest growth in home prices, and a gradual recovery in home sales activity.
Whether you are looking to purchase your first home, making a move due to a lifestyle transition, or seeking an investment, we are here to support your Edmonton Real Estate goals. It is never too early to discuss your home-buying or selling goals. Let’s chat today.
