Joe And Doug Williams

Upcoming Mortgage Rule Changes

05 January 2018
Joe And Doug Williams

(See Attached Recent Stats for 905 & 416 Regions.)

Market activity has picked up in the fall and November has seen this trend continue. Some commentators point to upcoming mortgage rules that take effect in the New Year – as a motivating force for buyers. The thought is that a contingent of buyers are expediting their home buying plans and purchasing in 2017, so that they can qualify for a larger mortgage.

I will link to more information on the mortgage rules – but to summarize – they will reduce the amount that uninsured buyers (those with a 20% or larger downpayment) can borrow.

OFSI Mortgage Rules

I think it is unclear how much of an impact the OFSI rules are having prior to their implementation. True – some buyers will certainly accelerate their home buying plans so that they can get approved for a higher mortgage in 2017. But I think there are many others who are waiting on the sidelines to see how the market reacts to the new rules. There are also a great deal of people that are proceeding patiently with their home buying plans, who are comfortable with the financing they will receive on either side of the New Year.

Another factor that is hard to measure, but it is significant, is deferred activity. We witnessed many would-be home buyers, put a pause on their plans over the last year. Some paused due to rapidly increasing prices, and some paused because of perceived “nonsense and craziness” in the market. Others took a break when they saw the market dramatically change after the government introduced measures to cool the market in April. Many homebuyers wanted to watch to see if a major correction was unfolding. Many of these buyers who put a pause on their search are resuming their plans, especially the ones that are motivated by a life event, such as a job change, a baby on the way or a marriage!

A huge number of millennial buyers still rank home ownership as a major goal, and many of these home buyers re-entered the market once it was perceived as more-sane, and less intimidating. This force along with literally thousands of other factors make the market so hard to read, and predict. The upcoming mortgage rule changes are certainly encouraging some buyers to expedite their plans – but I think it can be overstated – as there are more significant forces at hand.


Joe & Doug