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Subject Line Unlocking 2024's Mortgage Market Mysteries: Insights and Predictions. I have my Magic 8 ball ready

Happy New Year! Is it just me or does it really feel like a true New Year? What I mean is there seems to be a bit more “hope and anticipation” in the air. Personally I was very much ready to say Buh-bye to 2023.

As we dive into 2024, the heartbeat of Canada's economy synchronizes with the pulse of the mortgage market. My clients continue to ask me the same questions “what's going on in the market right now.” I hid in the corner at most Christmas parties ‘so Em what do you think is going to happen in 2024’ Well here we are. I can’t hide anymore. We are living it together so here we go. I will give you a summary of  what I think we could be in for on the ride of 2024. Hop in my mortgage car, let's go for a ride. Beep Beep!

Mortgage Rate Forecasts:

Charting the course of mortgage rates in 2024 is akin to navigating a thrilling winding road. Here's my anticipated roadmap:

  • Rate Fluctuations: Brace for dropping rates in the year ahead, commencing with fixed rates(already happening), trailed by variable rates and HELOCs. However, precise timelines remain elusive due to the market's dynamic nature. #thisismysafewayofsayingimnotexactlysurewhen

  • Projected Rate Drop: Anticipate a drop of one to two percentage points in fixed rates, fueled by expected decreases in bond yields throughout the year. This is my safe way of not saying an exact number so you will still read on and in 2025 and I will “look” as if I predicted correctly 

  • Bank of Canada's Influence: Speculations suggest that the Bank of Canada won't escalate rates further and might slash rates by 50 to 100 basis points in the latter half of 2024. I think this is why we are seeing a shift to a more positive outlook I am already seeing an uptick in mortgage applications it is only the first few days of January

  • Variable-Rate Mortgages: With impending rate cuts, there's a likelihood of a surge in preference for variable-rate mortgages, potentially straining household budgets upon renewal. People are already talking about variable rates on our calls right now.

  • Intense Rate Wars: A competitive environment prevails, challenging those dependent solely on rate offerings. Ask more questions. Rates are not the only factor and feature of your mortgage. You deserve better. Let me get better for you.

Insights into the Housing Market

A glimpse into the probable trajectory of the housing market:

  • Moderate Price Rise: Real estate prices might experience modest increments due to declining rates and continued immigration, yet a slower economy may impede substantial growth.

  • Affordability Impact: The scenario might improve for first-time buyers but might strain renewing borrowers, sparking diverse reactions in the market. Buckle up we are going to see lots of arguments at the dinner table.

Perspectives on Investors and Renewals:

  • Increased Investor Impact: More investors buying and renting homes are causing prices to go up because more people want to rent or buy houses.

  • Opportunities for clients to work with mortgage brokers who can offer more solutions than simply signing with the bank they are currently with. Engage early. I have been saying this for years. If you are up for renewal please contact me as soon as you start to think “is my mortgage up this year?”

Addressing Affordability Challenges

Navigating affordability hurdles and potential solutions:

  • Debt Management: Leveraging adequate equity to extend amortizations or refinance for debt consolidation proves beneficial for many clients.

  • Cash-Back Mortgages: A lifeline for those lacking equity, cash-back mortgages provide avenues to settle debts.

  • Affordability Dynamics: Despite an anticipated market upturn benefiting potential buyers, soaring home prices counterbalance this advantage.

Regulatory Insights and Speculations

A glimpse into potential regulatory shifts:

  • Budget Impact Expectations: Foresee potential changes in mortgage policies within the 2024 federal budget, given the impending elections. Bring on the promises from our future leaders #eyeroll

  • Stress Test Outlook: With stabilizing rates, the mortgage stress test is likely to plateau or even decrease from its current levels. This is something to look forward to for all of us.

  • Dream changes? If our regulator changed the insured rules from 1MM to 1.25 or 1.5MM for larger areas like GTA or GVA for example. 

Want to see a policy I personally believe in that could actually make a killer impact if implemented? Come on, you are already in my mortgage car what’s a few more moments on the winding road together. 

In the midst of these forecasts and market dynamics, envisioning future possibilities becomes key. Imagine the potential of a housing grant from the government, akin to Singapore's Home Caregiving grant, encouraging adult children to bring aging parents into their homes through financial incentives. This thoughtful policy could offer multifaceted benefits, impacting longevity, healthcare systems, retirement homes, and even housing shortages. This is not on the docket now but it is in my dream world. 

Thanks for taking a ride with me into 2024. As we maneuver through Canada's mortgage labyrinth, uncertainties persist. However, armed with adaptability, foresight, and a profound comprehension of market dynamics, let's navigate the year ahead with informed decisions.

Working with a pro who has your back is the first step in the right direction. If you liked reading this - you probably would like working with me on your next mortgage journey. Let’s chat

Warm regards,

Emily Miszk

BRX Mortgage Broker


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