Should I Get a Mortgage in the Spring?
Spring season is upon us. Although, someone should alert the weatherman because so far he’s been delivering nothing but unseasonably cold temperatures for the beginning of March in the BC Southern Interior. While we can’t do anything about the weather, we can can answer your question about getting a spring mortgage. Is this the season to make your move in the real estate market? Or should you wait until the summer of 2023? Let’s find out.
Why Getting Pre-Approved for a Mortgage in the Spring Season of 2023 is a Great Idea
Market Hangover from Q1 is Over in Spring
The first fiscal quarter (Q1) of any annum is a hangover from the final months of the year before. Projections regarding the Bank of Canada prime rate, subsequent mortgage rates, and home market values are all influenced accordingly. More often than not they are biased and don’t paint an accurate picture of what’s really to come. Q2 on the other hand, is when the fiscal year really begins for home buyers. as we get a more clear vision of what’s to come.
Ultimately, what buyers want is confidence and stability, yes – even variable rate mortgage pundits. Q2 (aka spring) provides that. For instance, while the 2023 inflation rate thus far has been improving from its peak from June 2022, it’s remaining somewhat stubborn.:
““So there might be a bit more stickiness with inflation than what the Bank of Canada has previously expected, but it shouldn’t be a problem for the next few months though since at this time last year gasoline prices were much higher than they are now.””Bloomberg
That “stickiness” is actually a good thing when you read between the lines. A fast drop from very high levels (as it was in June at 8.1%) too early is not sustainable, causing reactive decisions by the Bank of Canada (dropping the prime interest rate too early). Instead, the inflation rate currently sits at 5.92%, a nice improvement from 2022, but not so low that it will bounce the BoC prime rate right back at the first sign of economic trouble. This is why experts predict the Bank of Canada to hold the prime rate steady in their next announcement, which is just days away (March 8):
“Economists expect the Bank of Canada will hold interest rates at its key policy announcement next Wednesday”Bloomberg
The arrival is spring (Q2) is showing buyers that they can expect sustainable rates and sustainable market valuations. As a result, the only thing to gain by waiting longer is, well, nothing. Call us at 250-493.9111 to discuss your options.
Apply Your Tax Return to Your Down Payment
By the midpoint of spring you’ll know what your tax return will be. If it’s sizable, you have an opportunity to apply it towards the most worthwhile investment you’ll ever make – real estate!
Whether you receive $2,500 or $10,000 (etc) in tax refunds, the money will put a nice dent towards a downpayment, especially if you qualify for a first-time buyers incentive program. The downpayment amount required will of course depend upon the amount you want to borrow, and the percentage you’re required to put down. We can help you determine that.
What if you don’t get a tax return this year? Then you’ll still enjoy a timely motivation to get a mortgage, thanks to Canada’s First-Time Home Buyers’ Tax Credit (HBTC) which you can apply to your taxes next year. This is in addition to a number of other tax credits and rebates that may be applied if you purchase an energy efficient home. Call us at 250-493.9111 to discuss tax related benefits for your spring mortgage.
Spring Season Pricing
Prices of homes are generally cheaper in winter. However, winter is also loaded with significant household expenses. This makes spring the most ideal when it comes to capitalizing on real estate values. They remain typically lower in the early weeks of spring before increasing with the arrival of summer and early autumn. Is this pattern currently evident for the spring of 2023 in the BC Southern Interior? It is. The Herald reports that the Okanagan housing market has fallen to a 15-month low. Buyers should spring into action this season. Call us at 250-493.9111 to get pre-approved.