Interest Rates vs. Housing Prices

Confusing, right? Well, it can be for sure. But the key to understanding interests rates vs. housing prices comes down to fundamental economics.

It's important to look at the entire picture, and surprisingly, not just the random rambling of social media trolls.

If interests rates go up, the cost to borrowers increases. Naturally, this discourages some buyers from buying, resulting in a decrease in the buyer pool known commonly as "demand". When demand decreases, sellers have to decrease their prices in order to sell (basic supply and demand factors).

The opposite is true of decreased interest rates ie: more buyers enter the market (seller's market).

But it's not that simple. Increased interest rates can also be a good indicator of a strong economy, and strong economies tend to push prices and values higher, including real estate.

The key is understanding the fundamentals behind the scenes.

For example, are interests rates rising because the Bank of Canada has implemented policies to cool prices and slow inflation OR are interests rates rising because the economy is strong ie: bond rates have increased and investors need higher returns to enter the mortgate market.

This is not a one-way street. I buy properties when rates are down, and I buy them when they are up.

I am here to answer your questions and help you plan your decisions properly.