Canada Mortgage Broker News ~ July 13th, 2023
The Bank of Canada’s latest interest rate hike could contribute to cooler activity in the national housing market for the remainder of the summer, with little certainty for borrowers over where rates are eventually going to end up.
That’s according to James Laird (pictured), co-CEO of Ratehub.ca and president of the CanWise mortgage lender, who told Canadian Mortgage Professional that the new increase – coupled with climbing home prices in 2023 – may put a dampener on home sales activity.
“I expect it to be a pretty quiet summer as far as housing activity goes for two reasons,” he said. “One, rates have just gone up again, and we don’t know high they’re going to go. Two, home values rebounded significantly this year.
“So home prices are high again. In many regions across the country, they’re at or approaching their 2022 peak. Homes are fully valued, rates are up – those are not good ingredients for many transactions to occur.”
The central bank hiked its benchmark interest rate by a further 25 basis points yesterday, a decision that marked its 10th rate increase since March of last year and brought that trendsetting interest rate 4.75% higher than its rock-bottom pandemic-era low.
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