Speculations confirmed as sales jump in August

Speculations confirmed as sales jump in August

Speculations confirmed  as sales jump in August

The numbers are in and they’re confirming speculation that rising rates pushed fence-sitters into the market, with GTA sales alone skyrocketed 21 per cent in August.

“I definitely noticed an uptick in sales; our bank of rate holds was stagnant the month prior and people thought it was a lot of doom and gloom with rates appearing to go nowhere,” Justin Blacklock of TMG The Mortgage Group - Averbach Mortgages told MortgageBrokerNews.ca. “In August, and even before August, people became more motivated to buy. “

Overshadowing the GTA’s impressive end of summer sales surge – perhaps surprisingly to some – are sales in Blacklock’s Vancouver market where year-over-year numbers increased 52 per cent over the same month last year.

Blacklock believes the surge was due in large part to the slight increase in interest rates – rates he still believes are quite good.

“It is certainly a motivating factor, psychologically,” he said. “Rates are still historically low -- they have gone up, but it’s still affordable.”

Buyers may be overvaluing the importance of rate when buying a new home. Surges – like the one seen in August – have a way of driving house prices up as well; forcing buyers to overpay and essentially lose any savings they may have made on the low rate.

“Sometimes clients look to get into a hot market when the rate is low and they have to overpay for the house, which costs them money in the long run,” Blacklock said. “Would you rather buy a property you aren’t crazy about just because you got a rate of 2.99?”

However, it may be a good time for clients to lock in a good rate while they search for the perfect home.

“Rate shouldn’t be the determining factor for when they buy; they should visit a broker and lock a rate in so that when they want to buy, they will end up with the right place at the right time,” Blacklock said.