Real Estate Market Update: Summer 2024

With the first rate decrease in four years, what are the trends telling us about the Ottawa real estate market for the rest of 2024?

This long awaited interest rate reduction signals that going forward the costs of borrowing will be declining. This will allow more first time buyers to finally get the mortgage qualification that they have been impatiently waiting for and enter the housing market. It is anticipated that the bond rate will soon follow this downward trend allowing banks to start lowering fixed mortgage rates.

For those with approvals already in place, an influx of new buyers entering the market will increase the competition faced for the current, low inventory of homes.

There are less than 700 single family homes in the urban Ottawa area currently for sale on the MLS under $900,000. At the current rate of sale that’s less than a 2 month supply. This influx of new buyers will eat into the supply lowering, the months of inventory and creating a more favourable environment for Sellers, allowing them to ask higher prices for their homes.

Historically this pressure on the market has lead to an increase in home prices.

As of the end of May, 2024, the average selling price of a single family home has increased year over year by 1.2% to $736,000. That’s $8,832 more than at the start of the year.

Townhouses have risen by 2.1% year over year to an average selling price of $517,500, that’s $10,868.

As prices increase, those with mortgage qualifications under $800,000.00 may miss the opportunity to purchase a single family home As those Buyers refocus on more affordable freehold townhomes, that sector of the housing market will also experience price increases and a drop in supply.

With interest rates projected to keep dropping, a variable rate mortgage seems to be the best option. You can buy a house at today’s prices and pay for it in next year’s lower interest rate environment.

If you are looking to buy a single family home or a freehold townhouse this may be the best market to jump into. Prices are down from the highs of 2022 but on the rise. You get the benefit of lower prices with the prospect of a lower mortgage rate to lock into. Buying before the prices rise could save you substantial money in the long run. Ottawa home prices typically rise ~3% per year which translates to $25,000 based on the current average price.

Why pay $25,000.00 more if the right house is available now?

Ottawa Area Market Reports for June 2024

Ottawa Area Real Estate Market Report for June 2024
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