What does the latest Bank of Canada decision mean for homeowners?
Scores of homeowners across the country will have breathed a sigh of relief with the Bank of Canada’s announcement that it had once again decided to leaveinterest rates unchanged on Wednesday – but borrowing costs remain high with little sign of falling anytime soon. That’s the crux of the “good news, bad news” feel of the central bank’s latest decision, Ratehub.ca CEO James Laird (pictured) told Canadian Mortgage Professional, with the possibility of future rate hikes still looming over the mortgage and housing markets following that announcement. “The good news is they didn’t raise rates. The bad news is the …
Posthaste: 3.4 million Canadians will renew their mortgages by 2025 — and they’re worried
The days of “rock-bottom rates” are over and mortgage borrowers will have to adjust to the new reality. That’s the message from real estate brokerage Royal LePage, which released a poll Oct. 26 showing elevated homeowner anxiety about the coming wave of mortgage renewals. Over the next 18 months, the firm estimates that 3.4 million Canadians will renegotiate their mortgages — almost all at a higher interest rate. The poll, conducted from Sept. 8 to 14, found nearly three quarters of them are worried about the looming transaction. People are contemplating a series of financial changes to manage the anticipated extra drain …
Bank of Canada reveals October rate decision
The central bank has made its second-to-last scheduled rate announcement of the year The Bank of Canada has left its policy interest rate unchanged in its latest decision, opting not to raise rates further amid signs that the national economy is beginning to slow. The central bank announced this morning that it was holding that trendsetting interest rate steady at 5.0%, the second time in a row it has kept rates where they are as inflation continues to moderate and economic growth remains largely flat. In its statement accompanying the decision, the Bank said it was prepared to raise …
Variable-rate holders have room for optimism on next BoC move: CEO
Canadians with variable-rate mortgages or home equity lines of credit can expect a rate hold from the central bank this week, which would fuel their “cautious optimism” that there will be no further rate hikes this year, according to Ratehub.ca. “It is widely expected that the Bank of Canada will hold rates [this] week due to [the latest] lower-than-expected inflation numbers,” said James Laird, co-CEO of Ratehub.ca. “It is possible that there will be no further rate hikes in 2023.” On the other hand, Canadians who are looking for fixed-rate mortgages should hope harder, “because depending on the bank’s policy …
Canadians continue to struggle with rising housing, mortgage costs
Canadians continue to struggle with rising housing and mortgage costs, with the number of those who exceeded the national housing agency’s recommended limit for housing expenses on the rise. A new survey by ratefilter.ca showed that while the recommended limit set by Canada Mortgage and Housing Corporation (CMHC) on housing expenses was 30%, 62% of Canadians have exceeded this with the average household spending 37% of their pre-tax income on housing costs. Renters spent more money on housing compared to homeowners as they spent an average 43% of their pre-tax income. Homeowners only spent an average of 34%. However, just …
Bank of Canada likely to begin cutting rates in mid-2024: CIBC’s Tal
The Bank of Canada will probably start cutting interest rates by the middle of 2024 – and its overnight rate is likely to settle around 3%, according to CIBC deputy chief economist Benjamin Tal (pictured top). Speaking at the Mortgage Professionals Canada (MPC) national conference in Toronto this week, Tal said the central bank is reaching an endpoint on rate hikes, with its trendsetting rate likely to stay around its current level for the first half of next year before ticking downwards again. With the Bank’s penultimate rate announcement of the year scheduled to take place next week (October …
Canada inflation falls in September
Canada’s inflation rate ticked down slightly in September, falling to 3.8% compared with a 4% reading the previous month. Statistics Canada said on Tuesday that the broad-based deceleration had been driven mainly by lower grocery prices and costs of durable goods and travel-related services – although the price of gasoline surged, spiking by 7.5% last month. Mortgage interest and rent costs were by far the biggest contributors to the 12-month change in the consumer price index (CPI). The cost of servicing a mortgage compared with the previous September rose by 30.6%, with rent increasing at a yearly rate of 7.3%. …
CREA downgrades 2023 home sales forecast
The Canadian Real Estate Association (CREA) had updated its forecast for homes sales and activity and average home prices for 2023 and 2024 through the Multiple Listing Service (MLS) systems of Canadian real estate boards and associations. With new listings not sparking an increase in sales, and interest rates continuing to weigh down the economy, CREA said it expected 449,614 residential properties to change hands by the end of the year, a decline of 9.8% from 2022. That figure was revised downward from its July estimate as a result of lower expected sales in Ontario and British Columbia. Following a …
Industry CEO on finding opportunities in the current environment
With the saturation of high-quality information available to consumers, mortgage professionals need to work harder than ever to find the niches where they will thrive in. For Pineapple CEO Shubha Dasgupta, there will always be opportunities for brokers – if they’re willing to look further than they used to. “I think there is opportunity, but unlike the past few years where opportunity has been at the surface level, opportunity in today’s environment is available, but only for those who are willing to dig beyond the surface,” Dasgupta told Canadian Mortgage Professional. “So we have to look beyond what we traditionally look, …
How will a strong labour market impact the Bank of Canada’s next move?
The Canadian economy’s significant employment gains in September will likely put more pressure on the Bank of Canada as it approaches its next policy rate announcement, according to market observers. Data from the national statistics agency indicated that 64,000 jobs were added to the national economy last month, far exceeding earlier consensus predictions of a 20,000 gain. And while the unemployment rate was steady at 5.5%, Statistics Canada said that hourly wages surged by 5.3% year over year, markedly outpacing the most recent reports of 4% annual inflation. Dawn Desjardins, chief economist at Deloitte Canada, said that she “absolutely” agrees that …
