Do home buyers need to be cautious?

It seems many first-time home buyers are taking a wait-and-see attitude before jumping into the housing market. The question is: What are they waiting for? In an Ipsos Reid poll released in late March, 15% of those polled said they'll probably buy a house in the next two years -- down from 27% last year. About 75% of the 3,000 people polled between Jan. 31 and Feb. 8 cited the mortgage market restrictions for delaying their buying decision. However, six of 10 respondents didn't see the 5% minimum down payment and the shorter amortization as that big a deal. Eighty-four per cent felt real estate was a sound investment, and 52 % said now is a good time to get into the market. Could the overall uneasiness about the economy and the housing market be more perception than reality? Almost half of those polled said they believed mortgage rates are going to be at the same level next year, suggesting they see no rush at this point. The move-up market is also on hold, likely waiting to see if sale prices increase to get more value out their homes. It's true the housing market has slowed since Minister of Finance Jim Flaherty introduced the changes to mortgage rules. Many in the mortgage and housing industry believe he may have gone too far. His recent intervention with lenders advertising a 2.99 fixed rate special may have confused many Canadians and could lead to increased caution. With interest rates at historic lows, and likely to stay there through 2013, and house prices stabilizing, it's be a good time to review the reasons you might be staying away from the market. Consider the following: Because the housing market is cyclical in nature, corrections are to be expected Broad economic and industry forecasts have not been stellar, which contributes to the cautious mood The Bank of Canada has hinted it is less concerned about household debt levels Inflation rate is still in check despite a recent jump Credit growth is slowing, meaning consumers are shopped-out Job growth continues Interest rates are in no danger of increasing soon Overall, Canadians exercise fairly good judgment when it comes to borrowing A majority of homeowners believe they could manage their mortgage payments if rates went up Perceived market weakness may be keeping new home buyers out of the market; however, more mature, experienced buyer may see this as the right time to buy.

CMHC Introduces New Calculator and Mobile App for Homebuyers

CMHC is pleased to introduce two new tools to help Canadian homebuyers make informed and responsible homebuying decisions. CMHC's new Debt Service Calculator allows homebuyers to evaluate their financial situation and understand how much they can comfortably afford to spend on a mortgage. The easy to use calculator allows users to quickly estimate their gross debt-service ratio (GDS) and total debt-service ratio (TDS), both important measures in assessing their financially readiness for homeownership. The Debt Service Calculator can be accessed on www.cmhc.ca (search 'calculator'). CMHC's new 'Ready, Set, Home' mobile app provides consumers, especially first-time homebuyers, with comprehensive CMHC information and tools at their fingertips. The app helps homebuyers keep track of the details throughout the homebuying process and provides access to a variety of helpful calculators, articles and other resources. Recognizing the increasingly fast paced, electronic and mobile environment, the new 'Ready, Set, Home' mobile app is a free application that offers quick and convenient access to CMHC's extensive housing information. The app can be downloaded to your Blackberry, Android or iPhone device at cmhc.ca/mobile. These new tools are the latest additions to CMHC's comprehensive suite of resources that are available to support Canadian homebuyers. For more than 65 years, CMHC has shared a wealth of knowledge and housing expertise, as well as useful tools and guidance, to help Canadians enjoy an informed and assured homebuying and homeownership experience It pays to be informed and I can help. It is the highest form of a compliment to be recommended. My mortgage business comes from many sources but referrals from you rank at the top of my list. Please remember to pass my name along to anyone that may benefit from my knowledge and expertise.