Vancouver Housing Prices Up or Down?

by admin on May 13, 2010

The writer is an experienced BC mortgage broker with expertise in bad credit mortgage financing.

One of the two big variables in housing prices, Vancouver mortgage rates
, has been influx recently. The other variable affordability has been strained to incredible levels over the past few years.

The sudden shift in interest rates has not impacted the market values yet. The rule of thumb for mortgage payments is that it shouldn’t be more then 32% of total income to cover principal, interest, taxes and heating.

As housing prices spiraled in the 2000’s, mortgage lenders began to increase flexibility into the system by introducing 40 year mortgage, zero down mortgages, No Income Qualifier Mortgages. The parade stopped on the April the 19th with the introduction of stricter mortgage underwriting guidelines by CMHC.

Naturally CMHC is the big boy on the block and the industry followed suit. With the new restrictions on mortgage lending the prices in the market are now out of step. Especially in Vancouver, Vancouver enjoys or suffers the highest percentage of income to service mortgage payments. The average bungalow requires 80% of income to service debt.

While interest rates have adjusted downward in the past couple of days, the long term trend is upwards. Consumers will focus on the short term trends in mortgage rate adjustments. Home ownership and mortgages require a long term view.

The recent increase in housing prices was an aberration in the market. Real increases in house prices have historically matched inflation. Hold onto your financial common sense. Some buyers will try to time the bottom of the market…hoping and praying for a crash so they can cash in on someone’s misery. The key is to ensure that the price you pay is affordable; save some money, and above all you can sleep at night.

{ 1 comment… read it below or add one }

Leanne Oslund June 10, 2011 at 8:26 am

I’m a first time buyer and not sure how to find out what I qualify for.

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