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High interest rates have significantly impacted Canadians' finances, with 65 per cent indicating that lower interest rates would positively affect their financial well-being, according to Dye & Durham's Canadian Pulse Report for Q2 2024. On June 5, the Bank of Canada provided some relief by reducing its target for the overnight rate by 25 basis points to 4.75 per cent, with the next announcement scheduled for July 24, 2024. Phil Soper, president and CEO of Royal LePage, expressed that this long-awaited rate cut will likely spark activity in the housing market, as half of sidelined homebuyers plan to resume their searches once the bank rate drops, potentially driving up home prices in the latter half of the year.

The report highlights that high interest rates have delayed major purchases for 38 per cent of respondents in the past year. It notes that 42 per cent expect to make a significant purchase once rates decline, with 57 per cent waiting for substantial cuts. Martha Vallance, COO of Dye & Durham, commented that higher rates have successfully cooled consumer spending and managed inflation, but consumers are now ready to spend again once meaningful rate cuts are implemented. Lower rates are expected to impact industries such as real estate, automotive sales, and construction, which should prepare for increased market activity.

The report also reveals that 81 per cent of Canadians believe lower interest rates will make large expenses more affordable, including mortgage costs and home purchases. Many homeowners who renewed mortgages in 2023 and 2024 have faced increased monthly payments, with 41 per cent planning to refinance once rates decline. Renters also see lower rates as an opportunity to enter the housing market, with significant percentages indicating they would be more likely to purchase a home if rates fall. Young Canadians, aged 18-34, particularly feel that lower rates would make home ownership more attainable.

Read the full article on: REAL ESTATE MAGAZINE