Charting the mortgage market: a 2023 recap and glimpse into 2024

As we ring in the new year, I want to wish you and your friends and family a Happy New Year, full of good health and prosperity.

Now that we’ve officially turned the page on 2023, I’d like to take a moment to reflect on the significant trends that shaped Canada’s real estate and mortgage markets.  I’ll also provide a sneak peek into what may lie ahead in 2024.

2023 Recap: a Year of Resilience

As we look back at the year that was, I think it can best be described as one of resilience. Resilience shown by mortgage borrowers in the face of sharply higher interest rates, resilience of Canada’s housing market, and of Canadians and the economy as a whole.

Despite many Canadians dealing with the increased cost of every day goods and mortgage borrowers being subject to higher interest rates, many have by and large demonstrated remarkable tenacity and delinquency rates have remained at record lows. This steadfast commitment underscores Canadians’ ability to navigate financial challenges and prioritize their mortgage obligations.

It’s also been a year of progress on the inflation front. Even though headline and core inflation remain outside of the Bank of Canada’s comfort zone, we must also acknowledge just how far it’s already fallen. After reaching a 40-year high of 8.1% last June, it has continued easing throughout the year to its current level of 3.1% as of November.

As BMO’s Chief Economist Douglas Porter pointed out, such “swift and heavy” declines in headline inflation are rare and generally only happen following a serious recession.

On that front, the economy has also managed to hold up well. Although growth essentially stalled in the latter half of the year, experts are optimistic that a “soft landing” scenario will play out rather than a more severe recession.

Through all of this, housing markets across Canada have been surprisingly robust. Despite rising mortgage rates and softening sales, low inventory levels meant home prices weren’t as hard-hit as may have otherwise been the case.

Looking ahead to 2024: rate relief in store?

If all goes according to plan, 2024 should shape up to be the year of relief for Canadians.

The stickiness of inflation will be a key factor shaping the financial landscape in 2024 as the Bank of Canada continues to monitor its trend back toward the 2% target, which it expects to reach by 2025.

Given the sustained decline in inflation, Canadians can look forward to more stabilized prices on homes and every day goods and markets expect the Bank of Canada will be able to pivot to rate cuts later in the year. The timing and pace remain in the air, but will nonetheless be welcome news for new homebuyers and the estimated 60% of mortgage holders who face a mortgage renewal in the next three years.

Your trusted guide through 2024

As we welcome 2024 and navigate the ever-changing currents of the mortgage landscape, I am here to assist you every step of the way. Whether you’re exploring real estate opportunities, refinancing options, or simply seeking guidance on the current market dynamics, my expertise is at your disposal. If your mortgage is up for renewal in 2024, please reach out, as I can help you potentially save thousands.

Rather than renewing with your current lender reach out to a mortgage professional such as myself for a consultation.  Renewing with your current lender could lock you in to a higher rate or terms than you deserve.

Click here for more mortgage renewal info.