A Winnipeg real estate agent is confident the local housing market will remain steady, but mortgage and real estate agents alike say Winnipeggers are keeping a watchful eye on rising interest rates.
With limited supply, it’s still a seller’s market in some city neighbourhoods, real estate agent Alberto Carmona told Global News on Monday.
He said he doesn’t think the housing market is going to slow down drastically even as rates continue to climb.
They could, however, shrink the list of homes some Manitobans can afford, especially if they were pre-approved at a lower rate, Carmona said.
“They are concerned because if they were pre-approved at three months ago or two months ago, the rate (was) 2.4, 2.6 per cent,” he said.
“If the pre-approval expires now, the bank needs to pre-approve them again with the new interest rate: 3.6. 3.8.”
At the same time, a handful of Carmona’s clients are looking to sell secondary homes while the market remains strong.
“I do have a couple clients who … purchased for a very good price with a low interest rate, and they are thinking, or we are in the process of selling because we might be able to cash in extra.”
Carmona hasn’t come across any people listing their residences because interest rates are testing their budgets, although mortgage agent Beth Thrall says there’s panic in the air.
“For first-time homebuyers that got into the market in the last two years at the 1.5 line, yes, it’s very scary,” Thrall said.
But she’s quick to point out that rates do vary and were higher before the pandemic.
“We are going back to … where interest rates were in 2017 and 2018. We just have been very lucky over the last two years to have (had) such low interest rates.”
“Some older generations that would have had mortgages in the ’80s when they would have been at a 15 per cent rate, it’s really not that scary of times. It’s just learning how to manage your money.”
Mortgage specialist Peter Paley echoed that sentiment, adding that staying calm is key.
“I think the most important thing for anyone to ever do in this kind of situation is not panic and pull out your old Excel spreadsheet into your household budget. See how much money’s coming in and how much money is going out.”
Experts say homeowners could work with their mortgage provider to extend their amortization period or refinance their mortgage, which could lower monthly payments down the road.
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