When HSBC became the first bank to offer a 5-year fixed rate under 2% in June, it made national headlines.
Now, sub-2% fixed rates are par for the course. And not just for 5-year fixed rates, but for every term of 5-years or less.
Record-low borrowing costs have been a magnet for new homebuyers. So has the fear of missing out, a fear fuelled by historically low housing supply.
This cocktail of motivators is fuelling home values higher. Prices surged 14.3% nationally last month, with year-over-year increases as high as 18.4% in Ottawa and 17.2% in Halifax.
Indeed, one recent survey found that non-homeowners are now twice as likely to buy as they were at the end of last year.
“What a difference three months makes, from some of the lowest housing numbers ever back in April to the multiple monthly records logged in July,” said Shaun Cathcart, CREA’s senior economist.
An Unusual Economic Environment
“A big part of what we’re seeing right now is the snapback in activity that would have otherwise happened earlier this year,” adds Cathcart. “Recall that before the lockdowns, we were heading into the tightest spring market in almost 20 years.”