Did you know that the inflation and employment rates can strongly influence the housing market? Currently, both these factors have led to challenges relating to housing affordability.
Employment drives economic well being. Lots of jobs means lots of spending and when product demand goes up, prices go up and this leads to inflation. In order to keep inflation in check, the Bank of Canada raises the interest rates (cost of borrowing) to cool consumer spending. At present, however, there seems to still be a pent up demand from the pandemic. Ongoing demand for goods has led to an increased demand for employees and companies still continue to generate profit – leading to more inflation.
[Image: Inflation Rate Graph]
[Image: Stats Centre 1 year Sales/Active Ratio]
For home buyers & home sellers, it’s essential to understand the impact of rising inflation and employment rates. Affordability concerns and competitive conditions require close collaboration with your trusted Realtor and Mortgage Broker. They can provide guidance during the home sale and/or purchase journey. By staying informed and seeking professional advice, individuals can navigate the market with confidence, maximizing opportunities while ensure financial well being.
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