Today, two major housing announcements were made:

• It was announced that First-time homebuyers, as well as those purchasing new builds, will soon be able to take out an insured mortgage with a 30-year amortization, up from 25-years.
• Secondly the price cap for taking out an insured mortgages will rise to $1.5 million dollars as compared to the previous $1 million dollar cap. Meaning, if you purchase a home over 1 million, you will now be able to offer a downpayment of less than 20%.

It’s likely that the Canada Mortgage and Housing Corp. will raise insurance premiums for insured mortgages as a result of the expansions, but this has not confirmed, as of today.

Both of these proposed changes will go into effect on Dec. 15, 2024. As more details become available. I will be sharing them with you, you are welcome to connect [email protected]

I would like to share my personal thoughts on government interventions and interest rates, historically as rates decrease, home prices tend to increase (with full employment). Adding these two additional programs may increase or decrease pressure on certain segments the housing market. We may see increased pressure on houses valued between 1 million to 1.5 million and we may see decreased pressure on homes valued under 1 million. I guess we will not know for sure until the rules are in effect for a few months.

I believe there will be effects to the housing market, likely price increases as affordability ratios increase.

Let’s see what happens.