
US Previously Owned Home Prices Fall for First Time Since 2012
The median sales price of a previously owned US home slid in February for the first time since 2012, offering some relief for buyers still faced with high borrowing costs.
Latest Videos
The information you requested is not available at this time, please check back again soon.
The median sales price of a previously owned US home slid in February for the first time since 2012, offering some relief for buyers still faced with high borrowing costs.
Homebuilders are rising as much as 1.7% Tuesday after data showed previously owned home sales snapped a yearlong slide, rising in February by the most since mid-2020.
A bomb threat was called in just as a judge in lower Manhattan was about to start a hearing over a $250 million lawsuit by New York Attorney General Letitia James against Donald Trump.
New York Attorney General Letitia James asked a state judge to force the accounting firm Whitley Penn LLP to produce documents and testimony in her $250 million lawsuit against Donald Trump.
US sales of previously owned homes rose in February by the most since mid-2020, snapping a record year-long slide tied to rising interest rates and affordability constraints.
Nov 1, 2021
BNN Bloomberg
,A prominent Bay Street economist said if the market is correct in its “aggressive” expectation that the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022, then homebuyers should start preparing sooner rather than later.
“I think there is a risk of getting into the market at today's rates,” Benjamin Tal, deputy chief economist at CIBC World Markets, said in an interview Monday. “We are still dealing with emergency interest rates. Let's remember that these are not normal interest rates and eventually they will rise.
“If you're in the market now and you're thinking about buying this huge house with a huge mortgage, let's think about it for a second. Can you afford this mortgage if rates will be 10, 150, 200 basis points higher? If not, buy a smaller house or rent."
Bank of Canada Governor Tiff Macklem put Canadians on notice following the central bank’s most recent interest rate decision, warning rates could start rising as easy as April – much earlier than his original forecast of interest rates being on hold into 2023.
“We have to start thinking about higher interest rates and what it means, and clearly, the consumer is the number one victim here,” Tal said. “The question is to what extent higher interest rates will really kill the consumer.”
Ultra-low interest rates bolstered the Canadian real estate market throughout the COVID-19 pandemic and have helped propel home sales and prices to new heights.
“The bank rate is at 25 basis points now. It might go to 1.5, maybe two per cent, if the market is right. That's a significant increase over time,” he said.
With higher rates on the horizon, Tal said it will likely have bigger implications for new buyers than for those with an existing mortgage.
“The average mortgage now, the new mortgage, is about $450,000. So you do the math. It's an extra $250 per month, if you raise interest rates by 100 basis points. So, it's not insignificant,” Tal said.
He said homeowners that will need to refinance their mortgage in the next few years might be less impacted since Canada was in a higher interest rate environment back in 2017 and 2018.
While higher interest rates could tamp down the housing market, Tal doesn’t think it will necessarily translate into improved affordability since higher inflation is currently offsetting any meaningful wage gains brought on by the labour shortage.
“I think that when it comes to affordability, really the speed at which interest rates will be rising is key. Again, the market is pricing in six hikes in 2022. That's very, very aggressive, and we know that there is a significant difference between what the market is thinking and what actually will happen, but clearly we have to think about higher interest rates down the road,” he said.