With December officially here and a new month underway, homeowners may be looking for fresh guidance on where the housing market is headed. While some consult spreadsheets, others daydream about horoscopes to reveal what lies ahead. This week, we’re putting a mortgage lens on the stars—interpreting what the broader economy and key housing indicators are signalling for your wallet, mortgage, and property decisions this month.
Whether you believe in astrology or not, the financial forecast from the Bank of Canada and housing analysts offers plenty of substance. So, if you’re wondering whether it’s a good time to lock in a rate, refinance, or list your home, think of this as your real-world financial horoscope—backed by data, not constellations.
Interest Rates at a Crossroads
In the world of mortgage borrowing, interest rate decisions are the ultimate guiding stars. The Bank of Canada is holding its final rate announcement of 2023 on December 6, and Canadian borrowers are holding their breath. At the time of writing, markets are betting on a pause—keeping the overnight rate at 5.0%—but the outlook beyond that is beginning to shift.
Recent economic data shows inflation inching downward to 3.1% in October, according to Statistics Canada. Core inflation, however, is proving stubborn. For homeowners, this means the Bank may hesitate before making aggressive cuts. But the softer inflation trend signals some hope for 2024.
If you’ve been waiting to renew or refinance, locking in one of the best mortgage rates now—before the cycle turns again—might be a strategic move. Variable-rate holders in particular should weigh whether a fixed rate offers better predictability today.
Home Prices Showing Resilience—For Now
After months of cooling, home prices across major Canadian markets have started to stabilize heading into the holidays. According to recent data from the Canadian Real Estate Association (CREA), the national average home price in October was $656,625, up 1.8% year-over-year.
In cities like Toronto and Vancouver, prices have levelled off, though sales activity has slowed. This resilience suggests a floor is forming, supported by sustained demand and limited new listings. For current homeowners, this is a good sign—property values are holding despite high interest rates.
What’s key here is that Canadians aren’t panic-selling. Many are opting to stay put, renew existing mortgages, and explore flexible financing—like HELOCs—to ride out the storm. If you’re looking to tap into your home equity, there may be strategic value in acting now rather than waiting for the spring market.
Buyer & Seller Sentiment Balancing Out
The mood among Canadian homebuyers and sellers has shifted toward caution, but not complete pessimism. Consumer sentiment around real estate has become more balanced, reflecting realistic expectations amid higher borrowing costs and economic uncertainty.
For buyers, affordability remains a critical issue. Mortgage qualification has become tougher, and that’s likely to continue unless rates fall more significantly. If your current fixed rate is renewing in the next 6 to 12 months, consider reviewing your refinance options ahead of time to understand your updated affordability.
Sellers, on the other hand, are being more strategic about timing their listings. With fewer homes on the market, those still choosing to sell are commanding attention—but not necessarily bidding wars. This makes it a more even playing field, particularly for move-up buyers looking to trade in their current property for something bigger.
Planning Ahead for 2024
If you’re the type to make year-end resolutions, now’s the time to take stock of your mortgage strategy for the year ahead. Whether you’re looking to unlock home equity, purchase a second property, or undertake renovations, aligning your financing with next year’s market requires some foresight.
Reverse mortgages, for example, have seen a surge in interest from homeowners aged 55 and over looking to boost retirement income without selling. If you’re curious about non-traditional options, it may be worth exploring a reverse mortgage or a cashback incentive product to improve your cash flow.
For homeowners planning a new build or major home upgrade, checking your eligibility for a construction mortgage now could give you ample time to line up permits and financing before the spring build season begins.
Final Thoughts: Trust the Data, Not the Zodiac
As fun as it is to think about what Mercury in retrograde might do to your budget, the real stars to watch are inflation numbers, Bank of Canada updates, and your neighbourhood’s sale prices. We’re heading into a cautious but hopeful phase in the housing market—one where preparation and informed advice are more important than ever.
If you’re uncertain about your next mortgage move—whether it’s a renewal, fixed versus variable rate decision, or unlocking equity—let’s talk. At Unrate, we combine data with a personalized strategy to help you navigate the market without second-guessing your every step.
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