Canadian Mortgage Trends just released the results of a survey of “influential” economists and analysts who have provided their expectations for the year ahead (2024). These experts (ahem) ended up split on one key thing – the odds of a recession. The survey unveiled a 50/50 chance of this happening to the Canadian economy in 2024, leaving first-time homebuyers just as uncertain as they were before the results were published.
How should you feel about this flip-of-a-coin mentality? When it comes to expert advice from the Feds and Canadian economists, we encourage you to reference the following viral clip from comedian Pat Burtscher who essentially solved the economic crisis with one insightful joke:
Of course, it’s not that simple, right? Or is a recession actually arbitrary for a number of prospective buyers?
In reality, buying a house during a recession can be perfectly fine for those who have a steady job and have their financials in order. This is made possible by securing the services of a mortgage broker. Read below to learn more.
Why First Time Buyers in BC in Reasonable Financial Standing Can Leverage a Mortgage Broker to Buy a Home Without Concern Over a Potential (or real) Recession
A Broker Will Increase Your Buying Power During a Recession
During a recession, the theory is that consumer buying power falls. However, this is the side effect of consumer decisions to not spend money,, which for real estate is spurred on by the Bank of Canada’s incessant raising of interest rates. But when it comes to real estate, there is a lot of missed opportunity in not proceeding with a mortgage. Mortgage rates and home prices typically drop during a traditional recession as the market has fewer qualified buyers. Therefore, waiting until the powers-that-be tell you there is no longer a recession can result in lost opportunity.
We understand that this information may or may not bring you comfort in a decision to move forward with buying a house during a recession. This is where a mortgage broker (the right mortgage broker) comes into play.
The right mortgage broker can essentially “recession-proof” your plans to buy a home. They can do so by getting you access to better mortgage variable and fixed rates than those advertised by Canada’s big banks. This is made possible via the “bulk discounts” they receive on rates by constantly bringing lenders clients over the years. These discounts get passed on to buyers (you). In addition, a broker can identify, and help you qualify for first time buyer incentive programs that can take the financial stress out of a real or perceived recession. If together you don’t like the options being presented by the big banks, your well-connected mortgage broker can connect you to alternative private lenders who are less reactive to mild-to-moderate recessions.
In our opinion, the Canadian economy won’t see a significant recession in 2024 as fear-theorists would have many think. But even if there is a hiccup, buying a house during a recession can still be a very wise idea when you choose the right broker broker to support you throughout the process. If you want to buy a home in the BC Okanagan Valley, get pre-approved today with confidence, and call 250.493.9111 for a friendly conversation about what Carloni Mortgage Brokers will do for you.