Those fixed interest rates were going up on mortgages.  Did you think they only went up when the Bank of Canada announced a rate hike?  You're not alone.

This recent rate increase only affects variable rate mortgages & those who have them have seen their payments skyrocket.  However...

Fixed rates which are tied to the bond market have taken a few increases over the last couple of weeks.  That affects anyone wanting to purchase a home with a fixed rate mortgage which is everyone these days!  If you have a rate hold, you're good for that period of time (up to 120 days typically) to close at that lower rate.  Anything after that will go the new current rate.

Work with a professional to stay in the loop & understand these changes & how they could affect you.

That's the relationship between interest rates & listings it seems.  The higher the interest rates are, the less likely homeowners are to leave their lower interest rate mortgages on their current homes.

What about the relationship between interest rates & Buyers?  If they go high, Buyers may decide to wait & see if the prices go low, or at least lower.

Interesting times & new territory.

How does that work??  With the limited inventory in most markets, pressure is put on price by Buyers.  We continue to see & experience multiple offers at many price points, not just at the lower end of the market.  It only takes 2 to go multiple!

If there's so much interest why aren't sales up you may ask but we cannot sell what isn't for sale.  It's partly the cycle of Buyers won't sell if they can't find something to buy combined with homeowners sitting on very low mortgage rates who cannot afford the increased costs of a new mortgage if they're moving up the housing ladder.

What's next?  More of the same until inventory increases or the number of Buyers declines.

Interest rate hike today to cool off the surging real estate market.  Hmmm

One of the reasons the market is so active is that yes, there are Buyers but for very few listings.  Why so few listings?  One reason is homeowners sitting on mortgages with very low interest rates.  Now they're even lower in comparison & even less likely to move.

Look for even more activity from Buyers as they strive to use up their rate holds before they expire.  It could take a while to see the impact.