For the first time since March of 2020, the Bank of Canada on June 5th lowered its policy interest rate .25%. What does this mean for the average homeowner with a variable interest rate? Your payments could drop around $15 a month for every $100k you owe, give or take.
The interesting data is how the rates affect the market. Have a look at the above chart, you can see with the rate drops in 2020 the price of homes went up, as news of upcoming rate drops and a couple of announcements where they held the rates in 2023, prices have started to rebound and even come back up. Why does this happen? As rates come down, peoples buying power increases. Buyers who were maybe on the sidelines have now been added to the buyer pool, increasing demand, thus increasing prices.
As a real estate agent, the best tool we have is market history. Using the history for the past 10 years, I think as rates continue to come down, we will see an influx of buyers in the market and prices continue to rebound.
The above chart is specific to the Hamilton region. If you'd like to see these numbers for your area, feel free to reach out.
*Data provided by RAHB (REALTORS® Association of Hamilton-Burlington) and Bank of Canada
