Benchmark home prices across the country have been flat for the last year. This trend has not been seen for many years as prices usually move in one direction or another. This is despite the fact that we have had almost a 1% drop in fixed rates and almost a 2% drop in variable rates over the last year. It must be noted though that fixed rates have been relatively flat over the last 5 months.
Mortgage refinance applications are on the rise as consumers have the need to consolidate debt and reduce payments with the increased interest rates from when they originally obtained their mortgages. The potential for tariffs might spark a short-to-medium-term rate drop, but consumers who apply now can still take advantage of any lower rates in the next few months while they wait to close their mortgage.
Wednesdays mortgage market didn’t seemed phased by the US floating 25% tariffs on autos, chips, and pharmaceuticals. Mortgage rates were basically flat. From our perspective the tariffs are merely a negotiating tactic and if implemented will not be around for any significant period of time. If this is the case, their impact on mortgage rates and the economy will be insignificant. The Bank of Canada next meets on March 12th and there is roughly a 30% chance of a cut in the Prime rate by a quarter point. As mentioned earlier fixed rates have not seen any significant movement in the last 5 months.
In terms of the real estate market most of the slowness is coming from Vancouver and Toronto. The rest of the country seems relatively stable. Roughly 40% of the population feels that home prices will rise in the next 6 months.
CMHC is forecasting a small drop in the 5 year fixed rate this year in the neighbourhood of 0.30%. If this prediction comes true, then consumers may have to plan for rates to be in this range for quite some time and plan their cash flow accordingly.
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
For more information on our mortgage products and your preferred Abbotsford Mortgage Broker, please visit our website at www.ymscanada.ca.
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