The economy is forecast to take a turn for the worse in the next few years, with a recession expected to hit Canada in 2022 or early 2023.
While this may seem like bad news for homeowners, there are actually some things you can do to protect yourself from the potential effects of an economic downturn.
One of the most effective ways to recession-proof your mortgage is by making sure you have a large enough buffer built up in your savings account. This will help you make your mortgage payments even if you experience a drop in income or lose your job altogether.
It's also critical to have a solid plan for how you'll manage your debt if the economy takes a turn for the worse.
If you're carrying a lot of debt, now is the time to pay it down or look to debt consolidation to help you gain more cash flow, which will be necessary during a recession.
And finally, make sure you have a thorough understanding of your mortgage terms and conditions. This will help you know what to expect if interest rates start to rise or your property value declines.
You shouldn't just sign off on your mortgage renewal as the renewal rates will probably be higher than your current rate. It is wise to explore your options before committing to another term.
By following these tips, you can help protect yourself from the potential impacts of an economic downturn and keep your finances on track.
We would be happy to review your mortgage and help you customize a recession-proof solution. Please feel free to call or write. Call 647-773-4849 or email email@example.com
Home sales continue to slow.
National home sales fell 12.6% in April, but were still 23.8% higher than a year earlier.
In April 2022, home sales dropped in 80% of local markets, with the exception of Victoria, Montreal and Halifax-Dartmouth. The decline placed monthly activity at the lowest level since the summer of 2020.
Following a record-breaking couple of years, the housing market has cooled off over the last two months. Buyers should consider their options and sellers should return to traditional marketing strategies.
After 12 years of 'higher interest rates are just around the corner', the Bank of Canada has raised interest rates by a quarter point. This has already impacted fixed mortgage rates, and it won't take much more movement to affect variable rates.
The number of newly listed homes edged back by 2.2% in April, with sales falling by quite a bit more than new listings. The sales-to-new listings ratio eased back to 66.5%, its lowest level since June 2020, and there were 2.2 months of inventory.
The Aggregate Composite MLS® Home Price Index edged down 0.6% on a month-over-month basis in April 2022, although many Ontario markets were also up, while some others were flat.
The national average home price was $746,000 in April 2022, up 7.4% from the same month last year.
Source: (2022) Creastats.crea.ca. Available at: https://creastats.crea.ca/en-CA/ (Accessed: 23 June 2022).
By: Sarah Colucci
Senior Mortgage Agent, Lic. M14000929