How Interest Rates Have Changed Our Market

“Where is the market heading?” is a question we receive almost daily. Let’s take a look at the recent data to find out.

Our average sale prices have decreased every month since the peak, way back in April. In the 416 area code, we saw a decrease of 1.7% year over year. That’s a little over $1.6 million for a detached home. In the 905, we saw a 3.7% decrease and just above $1.3 million for a detached home. In both of these areas, we’ve also seen a decrease in the number of new listings, which means the growth of inventory is starting to level off somewhat. There might not be as much competition for sellers soon, and buyers may have fewer options than in recent months.

Interest rates have also had a huge impact on our market. We’ve seen them climb with a direct correlation to the drop in demand. In August, the one-year fixed mortgage rate was at 5.19%, and recently they have started stabilizing around 6.1% for a five-year fixed rate. Homes are now more affordable than they were back in June, so people are starting to get comfortable with these more stable rates. Hopefully, we’ll see more buyers start entering the market, but we’re also heading into the slower part of the year. Overall, it looks like the market is changing in a healthy way, with a more balanced market for buyers and sellers. If you or anyone you know has questions about why our market is shifting and where things are going, feel free to call or email us. We would love to help.