How August Sales Inspire Confidence and Instill Fear in Real Estate Market

Online, November 5, 2013 (Newswire.com) - http://www.canadamgc.com/debt-consolidation/mortgage-broker-vs-bank/] Mortgage brokers financial institutions and potential homeowners always look with anticipation towards home sales figures every month. The numbers usually represent the growth or decline in home sales every month. Previous month's (August) home sales have come with a huge surprise. Purchases have jumped significantly throughout Canada, with GTA alone witnessing a massive jump of 21 percent sales increase in August. These figures represent improving housing market and also show that rate increases are not far away.

There are a number of factors responsible for the increase in home sales. For the previous few months, the data for the housing market is positive. The speculation of potential increase in interest rates later this year has pushed fence-sitters and investors into the market. Earlier, the market was stagnant with a doom and gloom holding above its head due to stationary rates. Mortgage Brokers experts from Canada MGC have predicted that decent summer sales will culminate into strong surprise in the months of August and September. More buyers will keep the momentum going until rate increase becomes eminent.

In Vancouver area, the year-over-year growth has jumped almost 52 percent compared to August 2012. Canada MGC experts believe that rate speculation was behind the increase. But experts predict that rates still present a favorable opportunity for fist time home buyers and investors. Interest rates are still at historically low levels and looking to go up soon. This factor has a huge impact on the buyer's mindset.

On the contrary, situation can become complex as well. If buyers continue to purchase with increased vigor, they can push the property prices up well before the proposed rate hike. Overvaluation of the property is a common side-effect of such a frenzied market. Grabbing a good mortgage deal before the market heats up is the key. Home sales surge in August 2013 has the potential to increase home prices. This in turn can nullify all the savings that can be made on low interest rates. Our experts warn that overpaying for a home to take advantage of low rates can cause financial dents. How will low interest rates benefit home buyers when they are buying overvalued property and giving large down payments? Homeowners are advised not to jump into the buying a property just due to low rates.

Canadian homeowners must tread the fine line between taking advantage of rates and getting a genuine deal on high-end property. Rate is vital but it should not be the sole factor in deciding whether to purchase a property or not. Visiting a broker and getting a complete review of current market is important. They will definitely guide you in the right direction.

Improvement and potential risks are not over yet. For the Toronto real estate market, the fat lady hasn't sung. Our experts predict that mortgage rates are set to climb further in the month of October. Canadian bond market is threatened by the rising U.S bond yields. The direction of bond yields is uncertain and predicting them is impossible. But rate fluctuations are a given considering the current economic scenario. Consult a mortgage broker before entering the real estate market because things are going to change soon. For good or better only time will tell!