As bond yields took a surprising upswing last week fixed rates also followed course and we had a whole raft of lenders raise rates. This week rates are dropping back down again in Canada as a recent U.S. inflation report declares that bond yields have dropped by around 14 basis points. Canada’s 5 year yields dropped right alongside them. This is an optimistic start to the new calendar year.
As of right now, the buyer’s market looks positive for spring of 2025, as a predicted 50 basis points of total easing is expected for this year in the US. Accordingly, there is an approximate 73% chance the Bank of Canada will cut their rates by 25 basis points at their next meeting. Therefore we should see another small drop in the prime rate.
U.S tariffs against Canada will ultimately determine the way the market will go moving forward. Canada’s biggest lenders are keeping their rates unchanged as of right now, so we will see what 2025 will bring. Smaller lenders have had some minor yield spikes, but this is not expected to impact the market in any significant way.
Inflation Rate Chart
Canadian Real Estate Corporation has published a report of last month’s housing prices, and comments that we will see more buyers coming out if housing prices continue to lower. Here are some points worth noting:
Average Home Median Price Change: -1.9% (not including Nova Scotia & Quebec)
National Average Price: -3.1%
A continual decline in housing prices is uncertain as of right now, but CREA is optimistic that affordability is around the corner for 2025 home buyers.
If you need more information regarding mortgages of if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca
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