Canada’s hardy housing market seems to have met its match in the ongoing trade conflict, which has slowed its swift growth. One could readily believe that without the disruptions of trade tariffs, the housing market would be soaring once again. However, unless mortgage rates begin to reverse their current trend and descend, this may not be the case. Regrettably, the economic perspective of many individuals is influenced by the low mortgage rates experienced four to five years ago.
At the height of the pandemic, mortgage rates plummeted, and five-year fixed-rate mortgages were available at less than 2 per cent. Concurrently, variable-rate mortgages hovered around 1 per cent. When compared to that time, today’s rates, close to 4 per cent, seem excessive. Even though the slowing economy and fragile job market could logically lead to lower borrowing costs in Canada, this hasn’t been the case.
The ongoing trade war’s effects on worldwide financial markets have thrown a wrench in the gears, stalling any potential for lower rates at the moment. Despite having two recent opportunities, the Bank of Canada has refrained from reducing its overnight rate—a rate that has a major influence on variable-rate mortgages.
The bond market, which mainly dictates the direction for mortgage rates, has been more or less static for several months. If anything, there is a current bias towards increased bond yields. Could the present rates be the new standard for mortgages? For anyone considering buying a home, it may be time to consider this as the new norm.
As we move forward and round out the year, the largest improvements in housing affordability may stem from decreasing home prices as opposed to dropping mortgage rates. The effects of Canadians abstaining from travel to the United States were recently discussed in a Forbes article, emphasizing the significant economic fallout in terms of missed revenue and jobs at risk.
May saw a decline of nearly 40 per cent in the number of Canadian tourists visiting the U.S., a substantial drop. On an unsettling note, there was a recent incident involving a bank, a hapless client, and a case of criminal fraud, raising questions about liability when fraudulent activities occur.
MasterCard has introduced a line of payment cards specifically designed for those with sight impairments. These cards come equipped with notches on their sides, enabling users to identify them by touch, thus increasing financial accessibility.
The Canadian Real Estate Association’s policies on commissions have sparked the interest of the federal Competition Bureau, which announced last autumn that it has initiated an inquiry. For those who have an opinion to express on the matter, there’s an opportunity to do so.
Registered education savings plans, essential tools for parents hoping to financially support their child’s education, can seem complex. A simplified explanation could be useful for prospective investors looking informed making decisions.
A proposal for a GST rebate for first-time home buyers could mean an average saving of $27,000, a substantial financial relief. However, there’s a concerning trend on the horizon – a growing number of young people are living mortgage-free, and this could potentially signal trouble for the economy.
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