More homes are selling below listed prices, but mortgage brokers warn buyers aren't getting a better deal

If the goal of surging interest rates was to cool off home sale prices, realtors say it appears to be working — but according to a mortgage broker, rising interest rates mean buyers aren't always getting a better deal.

A document obtained by CTV News shows a list of home sales that took place in the last 30 days. While most homes were sold for tens of thousands of dollars above the listed price, some were actually sold below asking.

Here are some highlights:

• A home in Windsor's Walkerville neighbourhood listed for $399,900 sold for $380,000 on July 20: sold for $19,900 below asking.
• In the south Cameron neighbourhood, a home listed for $299,000 sold for $275,000 on July 25: sold for $24,000 below asking.
• The city's Roseland neighbourhood saw a home listed for $424,900 sell for $400,000 on July 21: sold for $24,900 below asking.

According to Windsor-Essex County Association of Realtors President Mark Lalovich, this is becoming more of a common trend.

"There's no question about that. The market has gone through a period of adjustment, going back to last summer," said Lalovich. "As far as buyers go, they're a lot more comfortable now than they were a year and a half to two years ago."

But when it comes to securing a mortgage, broker Linden Crain said these cooled-down sales prices do not mean buyers are necessarily saving money in the long run.

"It's becoming more difficult to qualify people. We're seeing more gifted down payments. We're seeing more co-signers being added to the mortgage," said Crain. "I'm having tough conversations with clients, especially when someone might be in a two to four per cent interest rate ... and then when I was referred to a friend of theirs a month later, I could only get them 5.5 per cent."

According to Crain, the lowest interest rate a new homeowner could get for a five-year, fixed rate (without insurance) was 4.39 per cent. Fast forward to today and that same rate has spiked to 5.54 per cent.

When applying those figures to a 25-year mortgage on a home sold for $500,000, that equates to a $400 difference in monthly payments.

"The longer you wait to buy, the more difficult it is going to be to enter the market because housing continues to appreciate," said Crain. "Yes, there's a little down period that takes place. But generally, the prices of homes keep going up."

As for Lalovich, he said it's important to keep in mind most homes are continuing to sell far above the asking price — but added any offer is worth putting down.

"You can't base your decision around waiting for interest rates to go back to two or two-and-a-half percent because that's unlikely to happen," said Lalovich.