Navigating your first home purchase in today's market

For many first-time homebuyers, entering the market can feel like a daunting task, particularly with rising interest rates and the increased cost of living. Despite these challenges, a growing number of Canadians are discovering creative approaches to make homeownership achievable – often without exceeding their budget. Here are some practical tips and emerging trends to guide you through this process and help you take that first step toward owning a home.

Innovative homebuying strategies

• Utilizing digital platforms: Many buyers are now exploring online platforms to streamline the home search and mortgage application process. A site such as ours at Homewise helps to make the process easy to find the best options from multiple banks and lenders. As shopping around is important.
• Opting for shorter mortgage terms: While fixed-rate mortgages remain a go-to choice, there’s increasing interest in shorter-term options to mitigate financial risks.
• Leveraging brokers: Nearly half of all homebuyers in provinces such as Ontario and British Columbia are relying on mortgage brokers for personalized support, alongside traditional lenders.

Short-term market outlook

As of Sept. 20, the Bank of Canada adjusted the overnight rate down by another 25 basis points to 4.25 per cent, down from 5.00 per cent at the mid point of the year. Although this rate cut may encourage more people to explore the housing market, particularly in the fall, the overall demand in major urban areas is not expected to spike dramatically. Nevertheless, this could be the window of opportunity that cautious buyers have been waiting for.

Uncovering opportunities in a changing market

espite current high-interest rates, gradual decreases are making borrowing more accessible. Coupled with falling home prices, this could present a favorable scenario for first-time buyers. Homes that remain on the market longer are often sold at discounted prices, offering a valuable chance for those looking to get the best deal.

Saving for a down payment amid rising costs

Although inflation and increasing living expenses make saving difficult, many buyers are finding ways to make it work. A significant number of first-time buyers – nearly 40 per cent – are receiving financial assistance from family members, with an average gift of roughly $75,000 toward their down payment. Additionally, only a third of buyers fully utilize tax-advantaged accounts such as RRSPs and FHSAs, which offer substantial savings potential. Even though the First-Time Home Buyer Incentive is no longer available, other programs such as the Land Transfer Tax Rebate, Home Buyers Plan, and First-Time Home Buyer Tax Credit still offer financial relief.

Practical steps for today’s homebuyer

• Plan your budget: Start by assessing your monthly spending and savings to establish a clear and manageable budget.
• Get pre-approved: Decide whether a fixed-rate or variable-rate mortgage aligns with your financial goals and risk tolerance.
• Consult with experts: Seek guidance from experienced mortgage professionals who can help you secure the best financing options based on your circumstances. Also, make sure you interview realtors. Everyone has different needs and just working with your friends, cousin’s mother-in-law may not be the best solution. Brokerages such as ours at Homewise Real Estate offer a variety of realtor to help buyers determine who is best for their needs.
• Search for listings: Something you are already doing, but always fun. Check out sites like our listing site to determine which homes and areas are right for you.

Staying informed about market trends and taking advantage of the right tools can empower first-time buyers to make confident decisions in the face of economic challenges. With strategic planning and support from knowledgeable resources, homeownership remains an achievable goal – even in today’s evolving landscape.