Cliff Barron here with the market update for August 3, 2023. It's mid-summer so I'm doing an update of how the season is going along.  To be honest, it's terrible! No, it's not that bad, haha. It's a typical summer, with the exception of the  interest rate problem that we're going through right now. Summer is always slow.  July and August are always slow. Every single year it's very rare that we have a busier July & August than April, May, June, because most people buy their houses and they close when school is out. Kids are out of school and it's time to go on vacation, go to the cottage and all sorts of fun summer things. The market traditionally slows in July & August, but the rate increase July 12 that we had (half a point - up to 5/5.5% prime) really slowed thing alot. Condos especially right now are really stalling - they're very slow.  

So let's see, September 6th is the next interest rate announcement. What's going to happen? That's the big question! The funny thing is, they raised the interest rates to bring down inflation, but they've raised them so much that the cause of inflation is the raise of the interest rates. For most people, their mortgages have gone up so much that they're spending the majority of their income on housing. Compared to where they were a year ago, I think it has gone up an average of 30%. So, they're at a point where if they keep raising it, they're at a risk of almost throwing us into a recession - so they have to be really careful. 

Right now, I'm getting the question - should I lock in, should I take a variable mortgage? I think we are to the point where if you can lock in for a small amount of time - one or two years, then switch to a variable - it would be beneficial. The next announcement, people are saying they're going to pause the rate (who knows?) or they could raise it.  If they do raise, then that will slow things even more. In the spring of this year, I think we had 2 pauses in a row - and what happened? The market just took right off again. Everything was selling over asking, we were getting multiple offers, prices were coming back. Then, as soon as they raised rates last time, things  really stalled. Like I said, it's a combination of it being summer as well the hikes. 
So, there is my prediction.  September 6th is the new rate increase. Are they going to go up? Alot of people say no. I think there's a 60/40 chance they wil go up again. The inflation numbers are always staggered a little bit - about 3 months behind - think they came in at about 2.8 or 3.8 (they want to get it down to 2%). Hopefully, by the time September 6th rolls around and they do their numbers, they'll go, "Oo, we're close to 2% now, so we don't have to raise it". If they don't raise rates September 6th, then the market will start to go up again and sales will turn over again and things will look rosy again. That's the plan.

If you're thinking of buying or selling right now... Let's see - buying? You can get a pretty good deal out there. I was talking to an agent the other day about homeowners mortgage rates. They're getting to the point where they're so high now that they're having to renew their mortgages and they can't afford it. I haven't had any of them yet, but they're coming I think. When that happens there's going to be some more panic selling a little bit, since people will be having to sell and downsize because they just can't afford their current mortgage. They're in a real pickle - where are they going to go? Everything is expensive - almost anywhere you go, it's expensive. So that could put a bit of downward pressure on the market. That could bring down prices a touch, too. So if you're buying, it's not a bad time to buy -there are a lot of sellers out there that are interested in doing a deal.
As far as selling goes, it's not a bad idea to wait a little bit (maybe about a month), see how that September 6th rolls in. If they do hold off on increasing the rate - if the rates stay where they are, that's a good time to get your house ready and get it on the market.

That's the best I can do for now!  I don't have a crystal ball unfortunately - I can just go by the reports that I read and what mortgage brokers tell me - and past experience!

Anyways, take care and have a great long weekend!