Housing affordability and getting into the market

“Just because the cost right off the get-go of land. Land development has risen quite a bit. So we’re looking probably more into the $400-$500 thousand dollar range as a starting point for most builds.”

Brost says that’s the reality these days.

When it comes to custom home builds, he says sometimes people’s wants and expectations exceed their budget and what they can afford.

“Probably the most desired home is a 3 bedroom, 2 bathroom family home with a garage and those tend to be in the $400-thousand dollar range including land and upwards depending on the options.”

But there is a first time home buyers incentive for those entering the market.

Mortgage broker Kristi Sauter with Trilogy Mortgage Corporation says it’s basically an interest-free loan and it was launched in 2019.

“The government is giving them the 5 percent additional on re-sale homes or 10 percent on new construction. Essentially what they’re doing is their loan is going to be less so their affordability will be more.”

She says this incentive may save buyers a couple hundred dollars each month in payments.

And next month on April 6, the benchmark rate is changing which determines the minimum qualifying rate for insured mortgages, also known as the “stress test”

“What they’re (Canadian Mortgage and Housing Corporation) going to do is if we’re qualifying people or if people are using an interest rate of 2.7 percent it’s going to be that plus 2 percent. So now instead of qualifying someone at 5.19 percent, we may be qualifying them at 4.74 – 4.79. What in turn that is going to do is it will allow people to purchase more of a property than what they would have qualified for previously.”

Sauter believes this will encourage buyers to purchase a home because there will be more leeway in affordability.

“So maybe those people who are shopping around the $200, $225, $250 (thousand dollar) price range and they can’t quite find what they’re looking for, that will give them about a 3 percent push in more house affordability and more variety to choose from when they’re entering the housing market.”

Sauter says she’s seeing first time home buyers spend in the $200-$300-thousand dollar mark.

While people who are selling and moving into the next home spend above $300-thousand dollars.

According to Medicine Hat Real Estate Board, a total of 61 homes were sold in February 2020.

That’s down 20 home sales compared to February of last year.

The majority of homes were sold in the $150-thousand to $400-thousand range.

by Chantal Wagner

Housing affordability and getting into the market

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