The housing market has returned to normal and balanced levels. Sales activity is still midway between the recessionary low of December 2008 and recovery high of December 2009. Over the past quarter, affordability improved in every market, making homeownership more attractive to buyers who have waited to enter the market.
Although there have been recent signs that the global economic environment is still fragile, such as the European debt crisis and the mid-year slowdown in the U.S. economy, the outlook in Canada remains positive. Despite sluggish exports, overall economic growth continues. Unemployment unexpectedly improved to 7.6%. The net worth of Canadians has risen to a new high, erasing the losses from the recession. Even though an increase in mortgages gave way to an influx of new debt, the rise in both assets and net worth has pulled debt-to-assets and debt-to-net worth down from the high. This bodes well for consumer confidence.
“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning” to normalcy, says Gregory Klump, chief economist at CREA. Moving forward, he cites rising rates and weak job growth as factors that are responsible for keeping sales activity and price appreciation stable and slower than seen during the recovery. With improved affordability, balanced markets, and record low mortgage rates, there are ample opportunities for both buyers and sellers.
