Yesterday the Bank of Canada held their key interest rate at 5% for the third time in a row. 

The next rate announcements are

• Wednesday, January 24*
• Wednesday, March 6
• Wednesday, April 10*
• Wednesday, June 5
• Wednesday, July 24*
• Wednesday, September 4
• Wednesday, October 23*
• Wednesday, December 11

There is a famous quote that says “time in the market beats timing the market”

This is because it is virtually impossible to time when the market is at it’s lowest and it’s highest.

In the 2000s the average 5 year fixed mortgage was 6.8%

In the 2010s the average 5 year fixed mortgage was 5.1%

And right now we find ourselves between about 4.89-5.4%

So if you forget the few years we had with low interest rates during a global pandemic and look at the big picture the current rates are at about the average that they have been over the last 20 years.

BUT

You know what has changed significantly though??? ...... HOUSE PRICES!

During the same 20 year period the average house price has gone up 3.5-4x!!!

Billionaire Ray Dallio – founder of the biggest hedge fund in the world says the simplest most important factor about investing is that

There are few sure things in investing … that betas rise over time relative to cash is one of them.”  

In plain English, he’s saying that major asset classes, over time, will rise (stocks, bonds, real estate). The value of these core assets will grow faster than the value of cash.

When you try and predict the best time to buy and sell, you may miss the months or years when the market makes the biggest moves.

When prices were booming during covid, a lot of people purchased homes at all time highs.  The people with long term hold time horizon (at least 5 years), who took fixed rates that they knew they would be able to afford are fine.

The ones who got ruined and were forced to sell at a major loss are the ones who were speculating, assuming they could quickly sell in a year for a profit or who tried to speculate by taking a variable mortgage and waited and waited and waited to sell until they couldn’t afford the property anymore.

So if your thinking about purchasing a home down the road and want to know when the best time to do it is.

Here is my advice!

The best time to do it is when you can afford to do it!  When you know you can afford the payments. Simple as that. 

If you plan on making a move in 2024 , I would love to help you with the process.

Reach out anytime!