Is It a Good Time to Sell My House with Recent Changes to Mortgage Rates?

Is It a Good Time to Sell My House with Recent Changes to Mortgage Rates?

When you are considering selling your home, you likely have a few key thoughts on your mind. First, you want to know if there are buyers for your home. And second, sellers are considering what price they are likely to get in order to allow them to make their next move whether that is a move up, a downsize or a change in life circumstance. Let’s explore these concepts further in light of the market conditions of today so you can decide if now is the right time for you to sell your home.
 

Are there buyers for my home?

Interest rates can be an important factor. For the first time since before the COVID-19 crisis some interest rates are beginning to creep higher. This is due in part to a sharp increase in the long-term bond yields that are correlated with interest rate levels. Many don’t realize that the relationship between mortgage rates and the Government of Canada bond yields is as strong as it is - bond rates change regularly and so too can mortgage rates. Given the bond yields have spiked it is no surprise to those in the financial sector that interest rates are showing signs of increasing.

According to Ratehub.ca, the lowest rate for a Canadian five-year fixed rate mortgage, climbed by 25 points last week to a 1.64% level. The five-year fixed rate mortgage is the most common type of mortgage in Canada. News reports indicate that both National Bank and TD Bank have raised rates on some of their mortgage products. Other banks, such as Royal Bank of Canada, said it had not raised interest rates recently.

While this change indicates that we may have seen the bottom of how low the interest rates would go in Canada for now, put into perspective from a historical standpoint the short term impact of this small change is slight. Relatively speaking a change of this magnitude would not be considered news at other times, in other years, leading into the spring real estate market. However, given how hot the market has been, it is expected that more people are watching key indicators of the market.

According to James Laird, Co-Founder and Co-CEO of Ratehub.ca, the first mortgage comparison service to integrate an in-house mortgage brokerage,

“Mortgage rates remain very low by any measure. I don’t think this will change consumer behaviour.” ~ James Laird, Ratehub.ca.

So with the continued pent up demand of buyers who are ready to purchase, historically low interest rates and a spring market around the coroner, this is still a very good time to sell.

Will I get the price that I want for my home?

 



The number of homes available can impact the price you will get for your home. But it is not always the way you think.

Today, using York Region as an example, the number of new listings is on the rise. In the case of detached homes, the following data demonstrates the current short term trend.

December 2020 - 572 new listings
January 2021 - 1026 new listings
February 2021 - 1845 new listings

The market has experienced overall price increases. For the Toronto Regional Real Estate Board as a whole, there was an increase of 8.4% year over year, and listings were up only 2.6%. So while the number of new listings was relatively stable last year, the average selling price increased by 13.5% in 2020.

The spring market consistently, outside of pandemic considerations, has more activity in the market than at other times in the year. While there are more homes coming on the market today, the reality is that there are many buyers who have lost out on other homes or who have grown tired of multiple offer situations. Those same buyers are still keen to find their next home and today’s market offers a great opportunity to put your home on the market to many eager buyers.
 

Bottom Line

If you are thinking of selling, there is no question that the conditions remain favourable for sellers now and in the near future. If you would like to discuss your options, timing and price, I’d love to talk with you to see if this is the right time for you to make a move. Give me a call at 416-522-1112.

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