The Canadian real estate market is relatively calm these days, but buyers should plan and seize the right time before entering the purchasing process.

The housing market has shifted over the past few weeks towards a calmer state, and a collapse is unlikely, but homebuyers need to be patient.

It makes sense to wait to see how far the market will decline rather than rushing now at the first sign of improvement. Purchasing conditions are likely to be more favorable in a month or two than they are today.

The rise in mortgage rates was what finally broke the trend. This continuous increase has changed buyer behavior.

Earlier this month, 30-year mortgage rates rose to their highest level since 2009. This led to a drop in mortgage purchase applications to their lowest level since 2018, on a year-over-year basis, according to Altos Research.

It seems that this positive shift will benefit new home builders. Toll Brothers, a home building company, announced strong earnings last week. They said on their call that the moderation in demand they saw recently appears equivalent to the seasonal fluctuations they experienced before the pandemic. Their customers placed non-refundable deposits of $75,000 when applying – far from the low deposits during the mid-2000s housing bubble, so the 1% interest rate reduction in May this year may not differ significantly from the previous quarter.

They have also been trying to rebuild their inventory so that when customers come searching for homes, the wait is closer to 9 or 10 months from the date, instead of 15 months last year.

For people looking to buy, there are three good reasons to wait.

The first is that we are about to leave the strongest seasonal period of the year. Even in a normal housing market, you would expect the supply of homes to rise and prices to decline over the next few months. Generally, if you don’t find what you want by Memorial Day, there is no need to rush to buy a place.

The second is that for the first time since the pandemic, the market has started to decline. There will be more homes listed for sale a month from now than there are today. And the percentage of homes undergoing price reductions, although still below the normal rate, is rising rapidly.

If the economy faces a mild downturn rather than a sharp one, stock investors might regret waiting to buy, but housing moves more slowly and has a different dynamic. Whether we have a mild downturn or a sharp one, you will have time to wait a little to see which will be better.

The third reason is that with signs of weakness appearing in the macro economy, long-term interest rates have already fallen in recent weeks, which has just started to appear in mortgage rates.

Mortgage rates dropped to their lowest level in a month this week, and if the economy continues to deteriorate, the conversation about mortgage rates may shift from whether they reach 6% to whether they drop below 5%.

Editing: Dima Abu Khair