Interest rate cut offers relief and hope for some Londoners

A home for sale in London, Ont. is seen on Wednesday, July 24, 2024. (Sean Irvine/CTV News Londno)

Today's rate cut by the Bank of Canada (BOC) has perked the ears of some Londoners looking to enter the real estate market.

Still, many tell CTV News they plan to wait until multiple economic areas improve.

As a result, London's real estate market continues to remain sluggish.

The CEO of the London St. Thomas Association of Realtors doesn't expect that to change much in the near future, but Bill Madder has long-term optimism.

"I think this is two in a row, which is great. And, they've [BOC] indicated that there is more to come. I think that that'll help. I think that's where we need the confidence in the buyers and sellers right now," said Madder.

In the interim, Breanne Ferguson, a mother of three young boys, looks to save where she can.

Even though her husband has a good-paying job in the auto sector, the family continues to rent rather than buy, as they save towards home ownership.

"Oh for sure, we do 100%. We're in the works right now. We're just trying to pay off some stuff and then we'll be up in that," she said.

Ferguson hopes Wednesday's rate drop will ease cost pressures on groceries, gasoline, and other everyday items.

Breanne Ferguson is joined by her three sons outside a southwest London grocery store. The family is looking to purchase a new home if interest rates continue to drop. July 24, 2024. (Sean Irvine/CTV News London)If that happens, the family's dream of home ownership may be attainable, especially if rates fall by a full one or two per cent.

"One million per cent would be a lot better for us and for everybody else as well," said Ferguson. “It’d be easier to get things, things that you want and all of that stuff."

Senior Don McLeod understands the frustration. He bought his first home in the early 1980s. At the time, some of his friends were paying nearly 20 per cent mortgage rates.

He remembers feeling lucky to get a newly built home for half that.

"So when we looked at 10.25 per cent, that was a builder's mortgage with four years left in it."

While 10 per cent seems overwhelming today, in 1980 price was the advantage.

"We paid $79,000 for a split-level, three-bedroom home out in Byron."

Today, the same home would go for nearly 10 times as much.

Bill Madder acknowledges the stress rising prices have put on buyers, but he cautions that waiting for rates to fall further might not be the best plan.

"It's probably not a good thing to try and time it perfectly. I think it's a good time when it's right for you and your family to make that decision. That's the time to do it."