Rising interest rates affect home buyers

In the community of Glace Bay, NS, it is difficult to find a house for sale.

Inventory is relatively low as the housing market continues to grow in the Cape Breton Regional Municipality and the rest of the Maritimes.

“It’s a very hot market now,” said Sydney estate agent Valarie Sampson. “People are always looking for waterfront properties and they come from outside the province.

Some pundits are predicting the housing market will slow with the Bank of Canada raising its key interest rate, but Sampson doesn’t see that happening.

“My heart really goes out to first-time home buyers and people trying to get established. It’s going to be very hard on them,” she said.

Those who already own a home, especially those with an adjustable rate mortgage, can expect to see a direct impact on the amount they pay.

“It will affect them because higher interest rates mean higher mortgage payments and people will have to put off those big purchases,” said George Karaphillis, a business professor at Cape Breton University.

He says paying off loans faster should be a priority for many right now.

“People went out and bought a lot of assets because interest rates were low. People borrowed a lot to buy homes and that’s one of the reasons the housing market is out of whack. , because mortgage rates have been so low for so long,” he said.

Karaphillis says the interest rate will continue to climb throughout the year, at least until the central bank rate hits 2% and maybe beyond.


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