Jason Mercer (pictured top), TRREB’s chief market analyst, told Canadian Mortgage Professional that despite the uncertain economic climate, borrowers are still likely to face a more positive landscape moving into next year.
“Obviously, we continue to watch inflation vis-à-vis the Bank of Canada decision on borrowing costs. So the labour market remains strong, and there’s obviously still substantial demand for consumer goods and services – that’s provided support for inflation despite higher borrowing costs,” he said.
“I think the consensus view is that while it’s possible we could see further tightening on the part of the Bank of Canada, [in the] medium-term, the expectation still is that we’ll see lower borrowing costs as we move into 2024.”
The market has seen a surprising amount of resilience in the face of economic headwinds and higher borrowing costs, according to Jesse Abrams, Co-Founder and CEO of Homewise.https://t.co/5sUdwG6FWE#mortgagenews #housingmarket #markettrends #interetsrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 18, 2023
What strain are higher interest rates putting on the GTA housing market?
Even with interest rates remaining elevated, borrowers appear to be adjusting to the new reality and beginning to re-enter the market, Mercer suggested.
“We’ve gone through a year now of substantially higher borrowing costs. And despite that, we’re starting to see more people moving back into the housing market and actually starting to see tighter market conditions and upward pressure on home prices,” he said. “And so what generally happens in these types of cycles is that people take an initial step back and sort of reassess their situation in the market.