There are many factors to consider when purchasing a home, two of the biggest considerations are (1) Employment and (2) Mortgage carrying costs. High mortgage rates equal a higher monthly payment and vice versa for low mortgage rates. Higher mortgage rates limit the amount of homebuyers who are able to enter the market.

According to the Canadian Mortgage and Housing Corporation (CMHC) changes in mortgage rates really have an effect on the housing market in Barrie and the surrounding areas. The chart below shows the relationship between mortgage rates and home sales. It depicts Quarterly data from the second half of 2007 to the second half of 2011. Mortgage rates are a very important consideration for homebuyers in Barrie.

Canadian Mortgage and Housing Corporation, Figure 3, Hosing Now - Barrie CMA - Fourth Quarter 2011

Sales growth has decreased when mortgage rates remained high and when mortgage rates dropped, sales increased in response. From the fourth quarter of 2009 to the third quarter of 2010 it looks like the relationship is one-to-one but this isn't so. During this time, according to CMHC, the sales response to the drop in mortgage rates was so strong that it couldn't be sustained for more than four quarters. Since then however sales have grown or declined in response to falling or increasing mortgage rates.

As always feel free to contact me for more information on the Barrie real estate market and be sure to pass this article on to any family or friends who may find it useful.

Sincerely,

Peggy Hill

Peggy Hill is a Broker of Record conducting business in the Barrie real estatemarket. She has many Barrie real estate listingsand is an expert in Barrie Homes for sale. Visit her website for more information about Barrie real estate.