For the past few years, many Buyers have had two common reasons for waiting to purchase a home: interest rates felt too high and home prices might fall further. At the time, both concerns were understandable. Higher borrowing costs changed what many Buyers could afford, while declining prices in several Canadian markets created uncertainty about whether buying too soon meant paying more than necessary.

But the market has been changing, and some of the conditions that caused Buyers to pause are no longer quite the same. Interest rates have stabilized, national home prices have recorded an increase after an extended period of declines, condo prices have also moved higher, and home sales have increased for several consecutive months.

That does not mean Buyers should rush out and purchase a home. It does mean that anyone who stopped looking based on market conditions from a year or two ago may want to take another look at what is actually happening today.

Why So Many Buyers Decided to Wait

When interest rates rose, some Buyers were no longer able to qualify for the same homes they had previously considered. Others could still qualify, but the higher monthly payments made them uncomfortable with the idea of purchasing.

At the same time, home prices began falling in many Canadian markets. That created an understandable question: if prices are dropping, why buy now instead of waiting for them to fall further?

Many Buyers responded by renewing leases, staying in homes that no longer suited their needs, moving in with family or simply stepping away from the market altogether. Waiting made sense if the conditions they were waiting for were actually going to arrive.

Interest Rates Have Stabilized

One of the major changes is that the Bank of Canada's policy rate has stopped declining. The overnight rate has remained at 2.25% through multiple consecutive decisions, which changes the assumption that Buyers can simply wait another few months and expect another significant rate cut.

That does not mean rates cannot decline again. Economic conditions can change, and monetary policy can change with them. The important consideration is that a future round of significant rate cuts could require a weaker economy, which may also bring concerns about employment, income and financial security.

In other words, lower borrowing costs do not necessarily arrive alongside better overall buying conditions. Sometimes rates fall because the economy is weakening.

For that reason, Buyers may want to avoid building an entire home-buying strategy around the assumption that significantly lower rates are just around the corner.

The Mortgage Rate Is Only One Part of the Equation

Another common concern is buying a home today only to see mortgage rates fall shortly afterward. That is certainly possible, but there is another side to consider.

If rates remain relatively stable and more Buyers return to the market, well-priced homes could begin selling more quickly. Sellers may become less willing to negotiate, and Buyers could face more competition for desirable properties.

The mortgage rate is only one part of the overall purchase decision. The price of the home matters. Its condition matters. The level of competition matters. The conditions that can be included in an offer matter, as does the selection of homes available at the time you are ready to buy.

A slightly lower mortgage rate does not necessarily provide an advantage if the home costs more or you have to compete against several other Buyers to secure it.

What Is Happening With Home Prices?

Nationally, the extended period of declining home prices has also shown signs of changing. The national benchmark home price recorded its first monthly increase after 16 consecutive months of declines, while condo prices also posted their first monthly increase in almost three years. Home sales increased for the third consecutive month as well.

It is important not to overinterpret those numbers. One month of rising prices does not mean Canada has suddenly entered another real estate boom. Not every city or property type experienced an increase, and national sales remained below the long-term average.

The more important point is that the long national decline may have stopped. Stabilization and rapid price growth are two very different things.

What Does This Mean for the North Okanagan?

National statistics provide useful context, but real estate is ultimately local. In the North Okanagan, the market continues to provide Buyers with a meaningful selection of homes.

At the same time, the number of new listings coming onto the market has fallen significantly compared with the previous year. That creates an interesting dynamic. There may still be plenty of homes available today, but if Buyers continue purchasing while fewer new properties are being added, the selection could gradually become smaller.

That does not guarantee that prices will rise. It simply means Buyers should not automatically assume that waiting six months will result in more choices.

There Is Rarely a Perfect Time to Buy

Many Buyers imagine that the ideal market will eventually appear. Prices will be low, mortgage rates will be low, plenty of homes will be available, Sellers will be willing to negotiate and the economy will feel strong and secure.

The challenge is that those conditions rarely occur at the same time.

When prices are falling quickly, Buyers can be afraid to purchase because they worry prices will continue falling. When rates fall because the economy is weakening, Buyers may have concerns about their jobs or income. When the economy is strong and confidence is high, more Buyers can enter the market and competition can increase.

The best buying opportunities are often difficult to recognize while you are actually experiencing them. The bottom of a market is only obvious in hindsight, after prices have already begun moving in another direction.

That is why trying to identify the exact bottom of the market is extremely difficult.

What Should Buyers Do Now?

For Buyers who stepped away from the market several years ago, the first step is to update the information you are using to make your decision.

Start by speaking with a mortgage professional about what you can qualify for today and, just as importantly, what monthly payment would actually feel comfortable for your situation. A qualification from several years ago may no longer reflect your current options.

Next, take another look at what is actually available in your price range. You do not need to schedule dozens of showings right away. Start online and see what homes are currently listed, what they offer and whether they meet your needs. You may be pleasantly surprised, or you may discover that the available homes still do not make sense for you. Either answer gives you useful information.

Buyers may also want to ask their mortgage professional about available rate holds. Some lenders and brokers offer rate-hold programs that can protect a rate for a set period while a Buyer continues exploring their options. The terms vary, so it is important to ask what is available for your specific situation.

The Market Has Changed, So Update Your Information

Have the two biggest reasons Buyers have been waiting completely disappeared? No. Prices could soften again, and mortgage rates could eventually decline. Local markets can also behave very differently from national trends.

What has changed is the overall situation. Interest rates have stabilized, national prices have shown signs of leveling out after an extended decline, condo prices have increased after a prolonged period of weakness, and sales activity has picked up.

Here in the North Okanagan, Buyers still have selection, while the number of new listings entering the market has fallen significantly. That is not a reason to panic. It is simply a reason to make sure the information behind your decision is current.

If you have been waiting to buy because of something you heard in 2022 or 2023, it may be worth finding out what your actual options look like today. The market will not send an engraved invitation when the bottom is over. Understanding today's rates, prices, inventory and available homes can help you make a decision based on the market you are actually in, rather than the one you remember.

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About the Author: The article above, Just Released! Real Estate Market Update for June 2023, was provided by Lisa Salt, an authority on Vernon BC and area real estate and a leader in the field of real estate blogging and vlogging.  Lisa and her group have helped literally helped thousands of families buy and sell homes since 1993. 

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