What’s Ahead for Mortgage Rates: A Bright Future

As the warm days of summer become a memory, there’s some sunny news on the horizon for mortgage rates. If you’ve been navigating the ups and downs of variable rate mortgages, renewing your mortgage, or buying and selling homes over the past two years, you’ve likely felt the impact of rising rates. But things are starting to shift in a favorable direction.

Good News for Mortgage Rates

The most recent inflation report for August has offered some positive developments. Inflation hit 2.00% (well, technically 1.95%), placing it right within the Bank of Canada’s target range. This is excellent news for mortgage holders, signaling that we’re on track for a period of lower rates.

In the last 90 days alone, we’ve seen three rate cuts from the Bank of Canada, totaling 0.75%. Meanwhile, the U.S. Federal Reserve has made a “jumbo” cut of 0.50%. With inflation falling into place and the Bank of Canada focused on supporting economic growth, we’re officially in what can be called the "Rate Cut Era."

The Road Ahead: What to Expect

For those looking at variable rate mortgages, there’s reason to be optimistic. The Bank of Canada’s policy rate is still considered in “restrictive territory,” meaning it remains elevated to help curb inflation. However, as inflation continues to fall, the central bank is expected to make further moves to support the economy.

Here’s what the experts are predicting:

• By the end of 2023: We could see two more rate cuts of 0.25%, bringing the total to 0.50% for the year. Some are even anticipating a 0.50% cut in December.
• Over the next 12 months: Economists expect a total of 1.50% in cuts, which would lower variable rates to the high 3% range by the summer of 2024.
• By Christmas 2025: Rates could drop by as much as 2.00% from today’s levels, meaning variable rate mortgages could settle in the mid-3% range.

What This Means for Buyers and Sellers

For those looking to buy or sell property, now is the time to start planning ahead. Lower mortgage rates create more favorable conditions for both buyers and sellers. As rates continue to trend downward, more people may feel confident in making a move, increasing market activity.

Work With Tyler Waldron, Your Local Real Estate Expert

If you’re looking to take advantage of these changing rates, it’s essential to have an experienced realtor by your side. Tyler Waldron is a top realtor serving the White Rock, South Surrey, and Langley areas. With his in-depth knowledge of the local market and expertise in navigating these economic shifts, Tyler can help you make informed decisions whether you’re buying or selling.