Deirdre McMurdy

The war is over — at least for now.

After months of inter-bank battling to win market share by offering Canadian consumers the lowest mortgage rates, Royal Bank of Canada and Toronto-Dominion Bank recently reached a truce: they raised their respective "special offers" on a four-year, fixed-rate house loan by half a percentage point to 3.49 per cent.

Whether other lenders follow that bid to improve bottom line profit margins by dispensing with cut-rate financing offers, whether slightly higher rates will cool the surging spring real estate market, remains to be seen.

But it doesn't alter a more foundational issue: is it the right time to buy a house now — or ever?

It's always tough to time any market: the ideal entry and exit points are never clearly displayed. But when it comes to residential real estate — the largest single investment for most people — messing it up can cause a serious, long-term financial setback. Especially when the return on a sale factors in adjustment for inflation and the five per cent commission on a sale.

The tricky issue of timing — along with record prices, bidding wars and increasing uncertainty about the sustainability of the current housing market — are just a few of the reasons why some experts insist that renting rather than owning, is the better way to go.

Admittedly, getting your head around that notion takes a bit of effort. After all, in Canada, low borrowing costs combined with a belief in the merits of owning a home have resulted in a 10 per cent increase in home ownership since 2000. Today, two-thirds of Canadian households live in privately owned homes, rising to 70 per cent in Vancouver and 74 per cent in Calgary. That's high by any international standard.

Culturally, we've all been inculcated since birth to regard home ownership as the holy grail of personal financial achievement. Emotionally, owning a home goes along with stability, commitment, security, family, community — all things we're hot-wired to value. It's an integral part of our identity.

And then there's the lifestyle that's built around owning a home and customizing it to your specific needs — everything from interior decoration to pottering in the garden. The cost of which can, of course, be justified as enhancing your investment.

Then there's the formidable vested interest of the economic engine that pushes home ownership. Governments encourage it because it not only provides for satisfied voters, it ensures that voters are engaged stakeholders when it comes to elections and issues. There are several program and tax incentives to encourage home ownership in Canada (including access to RRSP funds and the capital gains exemption), even though mortgage interest isn't deductible as it is in the U.S.