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Global News BC had a story reflective of many homeowners in the Metro Vancouver and Fraser Valley region struggling with rising mortgage payments. 

Click here for a direct video link to 'Gutted': Amid rising mortgage rates, B.C. couple sells home to go back to renting.

The cold hard truth is that the near zero interest rates we've seen in the past decade or so was a historical anomaly as the cost of money was artifically suppressed by reckless central banks like the Bank of Canada. This broken price signal encouraged many people to take on way more debt (especially mortgages) than they should have.

I always advise my buyer clients to stick with traditional affordability metrics that will ensure someone will be able to shoulder the total carrying costs of homeownership over the entire amortization life cycle, with ups and downs in mortgage rates. It is reckless and irresponsible to have assumed that record low interest rates were a new normal. Reversion to the mean is something people are beginning to understand, in the context of historical mortgage rates.

Current mortgage rates aren't high. They are in the range of historically normal and homeowners need to budget their cashflow as such. 

To the credit of the couple in this news segment, they made a responsbile decision to downsize; downsizing is a topic that I have previously written extensively about. The couple in question, in terms of a silver lining, is now going to be able to save money and gain more financial balance in their life. This is prudent and I think this is an idea that more and more over-extended Metro Vancouver homeowners will need to seriously consider.

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Interesting discussion regarding the weight of debt that many millenials are currently struggling with in Canada. See video at bottom of this post. In recent years, especially during the pandemic, many millenials and first-time buyers jumped into a frenzied real estate market to make a purchase. That was especially true in Metro Vancouver and the Fraser Valley housing markets.

It may be that many of these recent homebuyers didn't adhere to long-standing affordability metrics and maybe got swept up by emotion and/or FOMO.

If you are a Metro Vancouver or Fraser Valley area homeowner struggling under the weight of mortgage debt and would like an exit from being house poor, consider listing your home for sale. I can work out a flexible commission structure that could help ease the pain of selling, if that is a factor. The mental and physical stress that debt can have on an individual, couple or family can be consequential.

If you would like a free market evaluation of your home and to discuss some alternative housing options that may be more affordable and sustainable, please don't hesitate to contact me.

Click here for a direct video link

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