As we wind down 2018, we can look back at the housing market and see that affordability was the big topic across Canada. We have weathered many challenges in the housing market. From gloomy predictions of housing bubbles and increasing debt loads, to eroding affordability due to continued government rule changes. No doubt we will also weather any new challenges in the housing market.

The Housing Market

We saw housing prices increase in some areas of the country. In other areas we saw a slowdown of housing activity.  We also saw fixed-rates start to climb and the Bank of Canada slowly raise its interest rates. The later impacting variable rate mortgages as well as lines of credit.

While economic and demographic fundamentals remain strong in most parts of the country, policy changes in 2017 and 2018 have impacted some homebuyers’ access to mortgage financing. The new federal mortgage stress test was intended to slow the pace of borrowing and keep home prices in check. It has succeeded and will continue in doing so through 2019.

These factors have had an impact on decisions for first-time homebuyers and move-up buyers. New regulations have made refinancing and negotiating at renewal time more difficult. This is where consulting with a mortgage professional to determine your options will ensure you always have the best product for your needs.

What can we expect from Mortgage Rates in 2019?

I’ve had lots of conversations recently about rates. Should those variable rate holders lock in? Can we expect rates to continue to push higher in 2019?

I’ve always said, if being in a variable rate term will keep you up at night, then perhaps variable is not for you. What I mean is simply that fixed rates are still, despite the increases in the last year, at historic lows. While you may not win in a fixed term, you certainly won’t lose in a big way, so it’s not worth losing sleep over.

Some people can weather the storm of Prime rate ups and downs, both financially and emotionally, better than others. Know your budget and your personality, and do what is best for you.

All that aside, what can we expect for 2019?

We’ve seen some interesting activity on the bond market recently. From September to mid-November we saw the bond yield rise, taking fixed rates with it. Since mid-November, the yield has been in a declining trend which usually leads to lowering of fixed rates. So far, we’ve seen rate increases, but that might have more to do with the time of year than the bond market.

If the bond yield continues to decrease, I expect we’ll see rates follow suit. We’ve actually seen a few great lender promos in the last week, which is usually a sign that rates have stabilized or are preparing to decrease.

Rob Mclister also had a great article in the Globe last week that supports the idea that we could see fixed rates decrease slightly in 2019. Rob also thinks, and many economists agree, that we won’t see the Bank of Canada rate increases that were previously forecast for 2019. This means that we aren’t likely to see three Prime rate increases in 2019, and probably not after the BoC’s January announcement.

The Mortgage Broker Difference

Your mortgage broker is a trusted adviser and problem solver. Brokers take the time to first understand your needs, both short term and long term, then recommend the right mortgage and present options.

In addition to straight home purchases, brokers work with clients who refinance to consolidate debt, who are looking to purchase second homes, who are looking for the best options at renewal time, and brokers help clients make property-related investment decisions.

I continue to focus on the industry and keep up-to-date on changes. These changes apply to the local real estate market, as well as finance, credit, insurance and wealth management. I also understand credit issues and ways to improve credit scores. The end result is always helping my clients achieve their dream of home ownership.

But, enough about me.

The end of the year brings no greater joy than the opportunity to express to you season’s greetings and good wishes. May your holidays and New Year be filled with joy.

Wishing you health, happiness, and prosperity in 2019 and I look forward to working with you in the new year.