How Does The Recent Bank of Canada Interest Rate Announcement Affect the Current Housing Market?
What has seemed like a very long time coming, the Bank of Canada has provided some relief for Canadian borrowers with the announcement that they would keep their current rate unchanged.
The have decided to leave their rate at 4.5%, which is the first time since early last year that a rate announcement has not been accompanied by an increase. All of that said, economists and others who are involved in financial forecasting speculate that rate cuts by the bank may not take place until 2024 at the earliest. Even with that thinking, there are no guarantees that the Bank of Canada will hold its current rate until the end of this year, as they have already said they will increase rates if required. Of course this affects those with a variable rate mortgage.
That said, fixed rates have been experiencing bit of a rollercoaster ride in the past couple of months. The reason for this is that the yield on 5 year Government of Canada bonds have had some increases followed by some decreases.
The Question Is Always - When Will Rates Change?
You will get every opinion under the sun with regards to rates - some will say they will stay the same with no more hikes this year, some will say they might go down if economic trends continue to favour a decrease, and yet others will say there will be increases.
How Will This Affect the Housing Market Rebound?
It is no secret that Canada's housing market has experienced a dramatic cool down with the current economic scenario, which is exactly as the Bank of Canada designed it to do. Even though home prices and sales activity show year over year declines, in many of Canada's busiest markets, there is evidence to show that that trend may be slowing.
Why Should I get Pre-Qualified for a Purchase?
For any clients wanting to ensure that they are protected against upward fluctuation where interest rates are concerned, a mortgage pre-qualification is your best protection against the possibility of developments that may move rates higher in the months ahead. If we were to get a bad inflation number, there is a chance that the Bank of Canada could decide to add another rate increase. With your pre-qualification, we can be sure that your rate is locked in for the months ahead.
Your best move is to call us first when you consider buying a new home or when considering refinancing your current one!
~ Jeff Teed, Mortgage Agent
Mortgages KW
jeffteedmortgages@gmail.com
519-788-3775
Verico Best Mortgage Loans #16265
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