When interest rates are low, who cares the most?

When interest rates are low, people generally want to buy more highly-levered assets, such as real estate. This, of course, makes perfect sense, because lower rates mean more buying power. But how badly someone wants to buy more real estate should, at least in theory, depend on their particular situation.

If you're buying a pre-construction home, the current rate should matter less than what it might be in the future when it comes time to close (usually you can only lock in a rate for so long). That said, lower rates can help people feel richer because it buoys the value of their other assets/investments. So in this regard, low rates do help the pre-construction market.

On the other hand, if you're buying a home to immediately close on, then current rates matter a great deal. This is the rate that you are going to be paying. However, in Canada, the typical term for a fixed-rate mortgage is 5 years. Meaning that after 5 years the rate resets to whatever market is at that time. So eventually, the mortgage does become an adjustable-rate one.

In the US, this isn't the case. The most popular mortgage is a 30-year fixed-rate loan, meaning the rate stays the same for the entire 30-year period. What this means is that Americans should -- again, in theory -- want to buy more real estate -- the most -- when rates are low. That's the time to back up the truck and lock in a sweet rate for the next three decades.