Prospective homebuyers are rushing for pre-approvals
The housing market in the Greater Toronto Area (GTA) is starting to buzz with activity, thanks in part to a recent Consumer Price Index (CPI) report.
January's inflation rate came in at a lower-than-expected 2.9%, dipping below 3% for the first time since June 2023. This development has sparked speculation that the Bank of Canada might cut its overnight rate as early as this April, stirring excitement among potential homebuyers.
LowestRates.ca mortgage expert Leah Zlatkin observed a marked increase in buyer interest: “Interest has picked up and we’re seeing a significant uptick in pre-approvals, though purchases are still lagging mainly due to continued tight supply. We are hearing of bidding wars for some desirable properties.”
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She also highlighted the recent dip in fixed rates, which are now offering more attractive mortgage options than have been available for some time. Many people are speculating that the BoC will lower the overnight rate at some point this year and are trying to get into the market before the expected rush when rates finally do go down.
"We’re likely to see a very busy spring market this year,” Zlatkin said.
However, Zlatkin offers a word of caution for those considering variable-rate mortgages in the hope that the BoC’s future rate cuts will lead to savings.
"We still don’t know when the Bank of Canada will drop rates, and this strategy hinges on rates dropping sooner rather than later. It's still an unknown, and consumers need to do the math or talk to a broker to know whether this strategy is a suitable one for their needs.”
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