In Canada, the best five-year fixed mortgage rate has more than doubled this year, to 4.69 per cent, according to Ratehub.ca. In the United States, the 30-year fixed rate mortgage climbed to 6.94 per cent this week, according to U.S. housing finance giant Freddie Mac; that’s a 20-year high and up from 3.09 per cent a year ago.Sale prices for Canadian existing single-family homes in major markets fell 3.1 per cent in September, from August, according tohouse price data released this week.
“The relentless surge in mortgage rates to around the 7 per cent mark has caused the sharpest one-year deterioration in affordability on record,” Robert Kavcic, senior economist at Bank of Montreal, said in a note this week, referring to the U.S. housing market. So far, profits appear to be holding up: In September, Lennar reported a 4-per-cent increase in its fiscal third-quarter profit, compared with a year ago. KB Home reported a 70-per-cent increase in profits over the same period. Clearly, the healthy backlog in orders is helping.