Home sales have fallen 25 per cent since reaching a peak at the beginning of the year as demand slows and more houses come on the market.….If rates go up, it could be catastrophic for homeowners who have taken on more debt than they will be able to afford, he added.Meanwhile, sellers have become accustomed to fetching high home prices and want to hang onto their properties for as long as it takes to get those prices — although that window has stretched from a couple of weeks to a few months.“No seller wants to jump the gun, so a lot of people are sitting on the fence and trying to hold on,” Weisleder said. “A lot of people are very upset they didn’t sell six months ago.”
This could very well be signs of the start of the bursting of the Canadian housing bubble. This is exactly how the US one burst. Record high prices followed by a sharp drop in sales. Interest rates are going up and you will see people trying to bail from houses they now can no longer afford.
They try to sell but the market is saturated with other houses all with reduced prices. The sellers try to ‘hang on to the old higher pricing structure’ as the article indicated but it is a waste of time.
Soon defaults start cascading and the prices crash and we the taxpayers as the backer of the CHMC are left paying the price. It’s time that the CHMC be abolished and let the banks decide who they will risk lending to and require private mortgage insurance if they deem it necessary.