Why September is the Best Month for House Hunters to Lock in Mortgage Rates
The Bank of Canada reduced the overnight policy rate by 25 basis points to 4.25%, continuing a trend of decreases since June. This adjustment aims to stimulate economic growth and address remaining slack as inflation eases. Although inflation overall is decreasing, persistent price pressures in shelter and some services remain a concern. The economy grew by 2.1% in the second quarter, slightly above forecasts, but recent indicators suggest risks including slowing economic activity and stalled employment growth. The Bank is prepared to implement further rate cuts if inflation remains on track but is wary of the potential for excessive disinflation and deflation.
In light of recent developments, September 2024 is proving to be a favourable time for house hunters in Ontario. Mortgage rates have stabilised following a period of volatility, thanks to the Bank of Canada’s decision to pause rate hikes.
Although these rates are higher than the pandemic-era lows, they are still attractive in the current economic climate.
Seasonal dynamics are also benefiting buyers this September. With the summer rush over, competition has eased, giving house hunters more negotiating power. Sellers who couldn’t finalise deals over the summer may be more inclined to accept offers before winter. Additionally, inventory levels are improving, with a 5% increase in new listings compared to August, creating a prime opportunity for buyers. The Ontario housing market, including cities like Toronto, is seeing a slight correction with prices cooling from their peaks, offering a better entry point for buyers.