Looking to buy a home? Mortgage expert says now is the time to act

Amid the uncertainty that pervades today's real estate discussions, observers may be surprised to learn that opportunity is alive and well in the current market.

In an article for a Canadian Mortgage Professional, an expert predicted almost two years ago that interest rates were too good to be true and could not be sustained indefinitely. I encouraged my colleagues to secure 5- and 10-year fixed-rate solutions for almost every borrower at every opportunity.

That advantageous period of borrowing has passed and shows no sign of returning.

Similarly, today's economic climate offers a once-in-a-lifetime opportunity. Now is the time to invest in real estate in strong regional markets like Toronto and other Canadian metropolitan areas.

Fewer active buyers create a more balanced market

Many people may wonder how this is possible when interest rates are at record highs and inflation is out of control. The answer lies in the way buyers have been scared into inactivity as they process the new landscape.

With so few active buyers making genuine offers, bidding wars have subsided, allowing a more natural buying rhythm to emerge.

In fact, many GTA buyers benefit from conditions not seen in years. For the time being, the stress of competing against a flood of competitive bids has subsided. Unconditional offers are (almost) extinct. Home inspections, financing terms, and a lawyer's review of the status certificate are all becoming more common.

When will the market ramp up again? It is too early to tell — but it will not take much: 

• In recent days, bond yields have dropped. With it, we have also seen fixed-rate mortgages pull back. This might be the trigger. 

• 10 years ago, Canadian borrowers enjoyed 35- and 40-year amortizations. If they return to mainstream lenders, monthly carrying costs could drop and kickstart the housing market recovery. 

• Or, perhaps the regulator will revisit their (now dated) stress-test guidelines, enabling borrowers to qualify with their contract rate. This too could bring buyers back from the sidelines.  

Nobody knows how long this buying opportunity will last. One thing is certain, especially when the buyers return: bidding wars will return, and many people will wish they had acted sooner.