I am getting the twitches

I don’t own a house, I rent.  I enjoy renting at the moment, because it is giving me the opportunity to live in an area, I wouldn’t been live in if I was looking at buying. 

Property is at an all time high.  I am surrounded by older houses, in the country.  No mansions.  No Porches or BMWs parked in the driveways.  No pool boys.  Yet, for me to buy the property we live on, I will have to find someone to give me a mortgage of around $800,000!    We spied on a neighbors house which is listed at over two million dollars.   It is insane. 

My rent is very resonable, quite affordable, and it is actually cheaper for me to rent at the moment then to buy a house.    We have been looking at buying a house in the suburbs, however a fixer upper entry level starts at $350,000 and goes up to $500,000. 

Mortgage rates are rising, and have recently cooled off.  However, Bank of Canada is getting anxious over the rate of inflation (from 1.1% in Jan/07 to 2.2% in May/07, kudos to http://www.canadianeconomy.gc.ca/english/economy) and there is talk of rising interest rates.

Rising interest rates mean a higher mortgage payment, which means a lot of people who are looking at an entry level home (like me) might have to move into something smaller (townhome or apartment), relocate to a whole new city, or continue to rent. 

I am looking at renting for the next year, and see where the market is at then.  I am “hoping” with the higher mortgage rates, it will drop the property values. 

Property value will have to drop if mortgage rates go up. There are a lot of families who want to buy a house, however, if their mortgage payment is too high, they won’t buy = less demand = drop in prices to move the properties.   

I am getting the twitches.  I would love to buy my own place right now, however, I am concerned, that when I buy, the value will drop.  Paying a mortgage on something that isn’t worth as much, is actually just as bad as paying rent.  You are still throwing money to the wind.   

So for now, I will continue to dream and watch.  When the time is right, I will jump into the property market….  Until then, I will continue to enjoy the peace of the country!