Mortgage rate outlook for Spring and Summer 2023
With the Bank of Canada announcing a 25 basis point increase for interest rates in January, the main worry for the mortgage market in 2023 was the possibility of further rate hikes on the horizon. However, recent economic data and market volatility has had the Bank of Canada pause rates for the foreseeable future, with a potential policy reversal on the way as early as late 2023.
However, the Bank of Canada remains cautious, warning Canadians of the possibility of further increases “if needed” to return inflation to the 2% target. Bank economists believe the rate pause is here to stay Partly as a result of Silicon Valley Bank collapsing, bond markets have undergone a significant reassessment of future rate moves by central banks, which include the Bank of Canada. Before the Silicon Valley Bank failure, it was predicted that there would be a 0.25% rate hike by mid-2023. However, after the news, bond yields have dipped significantly and 5 year bond yields were down more than 30 basis points.
CIBC analysts expect the economy to evolve largely in line with the Bank’s hopes, and therefore see the overnight rate remain flat at 4.50% over the balance of the year. They believe that the Bank needs a clearer picture of where growth and inflation are headed, in order to either hike rates again or more definitively set aside that prospect. With so little time since it initiated its conditional pause, it simply doesn’t have enough data to provide that clarity.
Look for fixed mortgage rates to decline slightly Going into spring we anticipate fixed rates will decline slightly, and variable rates to remain the same as the Bank of Canada continues to pause further rate hikes. According to the Canadian Real Estate Association , sales activity rose 2.3% month-over-month, however the number of newly listed homes dropped 7.9% in February. View the latest mortgage rates from Perch, updated daily.
How will the housing market respond to interest rates? When interest rates continue on a downward trend, it’s likely to drive increased demand and drive home prices up. The reason for this is that when mortgage rates decrease, homeowners can afford a larger mortgage, which drives up the amount someone would be willing to pay. With rates rising materially over the past year, the housing market slowed in most major cities across Canada.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
ELLE Decoration Canada: Discover Our Spring 2023 Issue | Elle CanadaWe're excited to release the Spring 2023 issue of ELLE Decoration Canada, featuring the rise of colour and travelling to exceptional places through your home — on newsstands now!
Read more »
World Bank chief raises 2023 global growth outlook slightly, eyes debt progressWorld Bank President David Malpass told a media briefing that the upward revision was due to an improved outlook for China’s recovery from COVID-19 lockdowns
Read more »
Toilet paper 2020-2023: Families are scared sheetless by tissue pricesKids already know their global inheritance isn\u0027t worth what it once was. Using less paper is an investment in their future.
Read more »
World Bank raises 2023 growth outlook but warns on banking turmoil, oil prices - National | Globalnews.caWorld Bank Group President David Malpass said on Monday that the lender has revised its 2023 global growth outlook slightly upward.
Read more »
Sandbox Land’s plan for 2023 looks promising, but here’s a caveatTo date, over 115,850 LANDs have been minted by more than 23,500 LAND owners. However, SAND’s volume and whale transaction count declined, and metrics looked bearish. The Sandbox [SAND] recently published a blog highlighting its achievements pertaining to LAND Owner in Q1 2023 and what its plans are for the remaining quarters of 2023. 📢 […]
Read more »