Potential Bank of Canada rate cut would jolt slow housing market, experts say

A Bank of Canada interest rate cut could give Canada’s slow housing market a jolt, as prospective buyers gain confidence that borrowing costs are on the decline.

Since mid-2022, activity in the country’s real estate market has been mostly weak with sales consistently below the 10-year average. Homeowners have had to deal with the highest borrowing costs in years and would-be buyers have been cautious about making purchases because of uncertainty over the direction of interest rates.

A survey conducted earlier this year by Royal LePage found that around half of the people who put their home-buying plans on hold over the past two years intend to return to the market when interest rates start to fall. Christopher Alexander, president of Re/Max Canada, said a quarter-point rate cut will give some buyers “breathing room but not enough to bridge the affordability gap.”

Fixed-rate mortgages are priced off longer-term bond yields, such as three- or five-year Government of Canada bonds, rather than directly off the Bank of Canada’s policy rate.

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Potential Bank of Canada rate cut would jolt slow housing market, experts sayAny mortgage payment relief will be small at first, as the central bank is expected to cut rates slowly in the coming quarters, and many would-be buyers will remain priced out of the market
Fonte: BurnabyNOW_News - 🏆 14. / 77 Consulte Mais informação »

Potential Bank of Canada rate cut would jolt slow housing market, experts sayAny mortgage payment relief will be small at first, as the central bank is expected to cut rates slowly in the coming quarters, and many would-be buyers will remain priced out of the market
Fonte: globeandmail - 🏆 5. / 92 Consulte Mais informação »