How first-time homebuyers can prepare for the 2024 spring market

The spring housing market in Canada is finally beginning to show signs of life. With rates held steady once again in an effort to stabilize the market, there is optimism that the warmer weather will bring more activity. Adding to this optimism, the Canadian Real Estate Association reported an increase in new listings and sales at the end of March into April, signaling a potential upturn as we head into the spring season. For first-time buyers, this might be an opportune time to make a grand entrance into the market once and for all.

What can first-time buyers do to prepare this spring?

1. Budget beyond purchase price
If you’ve saved for your down payment – that’s great news. However, heading into the spring, you’ll want to make sure you’ve budgeted beyond the purchase price of the home. For instance, closing costs, which make up 1.5 to 4,0 per cent of a home’s purchase price, need to be taken into account. There are also additional expenses like a home inspection, furniture or even potential renovations that may be required in your new home. These can easily add up and are important to factor into your overall budget.

2. Get pre-approved for a mortgage
With greater activity potentially on the horizon, a mortgage pre-approval has many benefits, especially for first-time buyers. First, a lender (either directly, or through a brokerage such as ours at Homewise) will confirm how much you’re able to borrow, which will give you clear parameters of what you can and can’t afford. Second, it’s leverage. Spring is likely to bring more buying and selling activity and thus a more competitive market. In this type of environment, a pre-approval gives buyers an “edge” in the event of a bidding war. It shows sellers that you are a serious buyer and can help to expedite the closing process. Further, it lets you know exactly what you can afford, so you can determine how aggressively you will bid on a home.

3. Consult the right experts
Finding the right real estate and mortgage experts is especially crucial given the current market conditions. Although more activity is expected this spring, Canadians are navigating a higher cost of living and higher rates, which means there’s a lot more to consider when making a decision. A team of experts can also help you understand market trends and what they might mean for you, inventory levels, and how to discern what the right move is for you and your future. Companies such as Homewise and Homewise Real Estate work together to support first-time homebuyers to ensure they’re choosing the right lender long-term, and making a purchase that aligns with their short-term and long-term financial goals. Further, working with unbiased advisors will help you understand additional benefits that may be available, such as the new program that allows first-time buyers to have a 30-year amortization on new builds.

While there’s no telling what spring will bring for the Canadian housing market, there is enough evidence for first-time buyers to keep their ears and eyes open. Despite the current market environment over the last little while, with the right real estate and mortgage experts, the dream of homeownership is definitely within reach.