Terry Hepditch
There is one question that is at the forefront of New Home Buyers is:
What will happen to house prices in the near future?
Below is an article from CHMC which gives some insight into Canadian markets but before we go there, let’s talk about Rent to Own and fluctuating house prices.
When a tenant enters into a Rent to Own program, the terms are usually set for terms of 2-5 years. These terms will normally tolerate short term market fluctuations. When buying a home, whether through Rent to Own or a traditional mortgage it is still about “Location”. It is never recommended to buy a home in a market that is expected to have a long term downward price trend. So, when looking at locations, the economic outlook is a significant consideration. Even more so with Rent to Own.
Rent to Own Companies should use appreciation rates to determine the future buying price so if there are market fluctuations, there is time for house values to recover before the end of the term. Make sure when considering a Rent to Own program that the appreciation rate used is consistent with past and projected market trends.
COVID-19 has introduced a variable that is not totally understood so gathering information and understanding your market will be key to a successful Path to Home Ownership.
HERE IS WHAT CMHC HAS TO SAY…
“The COVID-19 pandemic has introduced unprecedented uncertainty to economic and housing outlooks.