Notable News of the Week: May 31, 2013
Mark Carney keeps 1% rate and bias towards hike in last policy decision – Financial Post
As expected, Mark Carney and his policy team left the overnight lending rate at 1.00 per cent in Carney’s final interest rate announcement as Governor of the Bank of Canada. Carney officially steps down on Saturday, after completing only 5 years of his 7-year term, and begins his new job at the Bank of England on July 1st. Following Carney’s final interest rate announcement, the Bank of Canada stated that, “with continued slack in the Canadian economy, the muted outlook for inflation, and the constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time”. In March, the Bank of Canada forecasted economic growth to be 1.5 per cent this year with a rise to 2.8 per cent in 2014. Policymakers indicated during the interest rate announcement that, when the interest rate does change, it will go up and raise borrowing costs.
Home sales expected to stabilize amid steady job growth – Vancouver Sun
The Canadian housing market is safely cooling down, rather than crashing, according to a new report from BMO Economics. While sales have slowed, the effects of stricter mortgage rules is being partially offset by low mortgage rates and continued income growth. Senior economist at BMO, Sal Guatieri, indicated that nationwide housing starts have been adjusting to the reduced demand and are returning to household formation rates. Home prices have reached record highs but resale markets are largely balanced. Next year, steadier housing prices are expected with decent job growth. The BMO Housing Confidence Report found that 48 per cent of Canadian homeowners plan to buy property in the next five years. This percentage remains very similar to the 2012 figure, demonstrating that a high level of consumer confidence in the housing market is continuing into 2013.
New low for Toronto low-rise home sales – Financial Post
For low-rise home sales in the Greater Toronto Area, this past April was the worst April in history. Even worse – year-to-date sales are 30 per cent below the long-term average. Lack of affordable housing was one of the major causes for historically low sales in the low-rise home segment, where prices have risen 6 per cent from last year to an average home price of $627,933. In contrary, high-rise sales were close to their long-term average and 38 per cent of new openings in April were sold in the first month. High-rise home prices have also remained relatively unchanged since last year, with an average price of $433,132. The price increases for low-rise homes continue to make these properties less affordable for homebuyers who may then choose or have no other option but to purchase a high-rise home.
CANADIAN MORTGAGE RATES TODAY
A look at current mortgage rates and 5-year mortgage rate history.
The average discounted mortgage rates in Canada in 2013:
A history of weekly 5-year fixed mortgage rates and 5-year variable mortgage rates.
