Should you consider buying a home in winter?

Do you have homeownership on the brain? Despite changing market conditions, inflation, and the risk of a recession, many Canadians are still planning to purchase a home. They have good reasons, too, because buying a home in winter can be an excellent decision. Particularly right now, when housing prices are falling and demand is dropping off, purchasing a house can be a smart move. Before you start house hunting this winter, though, be sure you understand what the market will look like!

What will interest rates look like this winter?

After last week’s Bank of Canada announcement, the final of 2022, the overnight rate now sits at 4.25 per cent. This means we’ll be entering 2023 with higher interest rates than any we dealt with in 2022. High rates, coupled with ongoing inflation, mean the cost of borrowing is going to be more expensive in the new year. Buying a home in winter means accepting this fact and being prepared to make higher monthly mortgage payments. Buying a house isn’t just about the price of the home itself, remember! Many buyers have put plans on hold thanks to rate hikes, so it’s important to consider how these affect you before you dive into the market. We do expect to see rates decrease at some point next year, but there’s no telling when.

Competition will be low

Right now, competition to buy a home will be quite low. Winter is traditionally the slowest season for buying a house. Something about the cold weather, post-holiday blues, and adjusting to a new year doesn’t make many people anxious to go house hunting. In 2023, this trend will be fuelled by the rate hikes mentioned above, prompting even more would-be buyers to delay their search. This means for those who are willing to brave the cold and the higher payments, you won’t find too many other people to compete with. This can  make buying less stressful for you!

Supply and demand in buyers’ favour

With fewer other buyers in the market, this tips the market in your favour. You likely remember that one year ago, when the market was at its peak, buyers were finding it nearly impossible to break into it. Low rates resulted in high competition, which drove prices up to unbelievable levels. Buyers were largely at the mercy of sellers and were going to large lengths to have their bids accepted, from huge offers to zero conditions. 

Buying a home in the winter, especially this winter, however, will bring some big changes. With less demand, housing prices will be lower. Sellers won’t have as much power to ask for incredible prices, and they won’t have a dozen offers coming in. This is good news for you, as you will have more control over negotiating prices and securing a home in your budget. The days of no-condition offers are quickly falling away too. With homes selling much slower, buyers have the time and are in the position to ask for a home inspection, for example. This is a condition that keeps you safe in case the inspection turns up big problems that could cost thousands of dollars in repairs. Take advantage of this condition so you have the freedom to walk away from the purchase if necessary!

Remember what you can’t see

Buying in the winter is different from other months when it comes to viewing properties as well. In the winter, snow might be covering parts of the property you would otherwise want to see. If the home has a pool, for example, you won’t be viewing that in February, nor will you be able to see the yard and gardens you’ll be owning. Another important part of the home is the roof, which you may not be able to see this time of year. Roofing issues like weak or curled shingles are important to know about before buying a home, because you don’t want to be dealing with leaks or an entire roof replacement six months after moving in. 

When you tour a home in the winter, be sure to ask for recent photos of the property without snow. This way, you can see everything you may not be able to right now. The good thing about viewing homes in the winter is if you fall in love with a house when it’s likely looking its least attractive, with grey skies and slush around it, you will almost certainly love it in the warmer months.

Reach out to a broker

Just because buying a home in the winter might be a slower time, that doesn’t mean you can skip the important steps that prepare you for the experience. For example, you will still need to work out an accurate budget, decide on a down payment, and secure a mortgage pre-approval. These all help make the buying process smoother and less stressful for you. The best way to get started is to contact a mortgage broker. We can work with you to find a budget that fits you, and help you find potential lenders and mortgage products. Brokers are your fastest path to connecting with lenders and securing mortgage financing.

Buying in the winter could be a good option for you if you’re prepared for what the circumstances will look like. It’s important to consider how interest rates may affect you, and the kind of relationship you are likely to have with sellers. No matter what, your first step should be to reach out to a mortgage broker!

If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.