Housing prices might soon shoot up

The housing market might be set for a comeback with expected rate cuts this summer. The market may seem to be slow now, with national sales dipping 1.7% between March and April. But if the Bank of Canada decides to cut interest rates this summer (making mortgages cheaper), real estate experts are betting on a surge in house sales. If sales go up, all that added demand will end up increasing home prices. This isn’t the first time that rate cuts have impacted housing prices — in March 2020, rates were cut to 0.25%, and two months later, monthly sales were up by 56.9% from the month prior. That demand fuelled price growth until February 2022, when home prices peaked at $816,720, only to start easing off right before rate hikes kicked in. Houses are currently selling for much less: $703,446 on average nationwide. It's hard to say if the cuts will light a fire under hesitant buyers because those shopping for a new mortgage are still facing high borrowing costs, even with possible interest rate cuts this summer. But, if you want to lock in the current price, now could be your moment to pounce.