BCREA Mortgage Rate Forecast for September 2023

Highlights:

  • Bank of Canada tightening sends mortgage rates to 15-year highs
  • Are high rates finally impacting economic growth?
  • How far will fixed mortgage rates fall once the Bank of Canada lowers its policy rate?

BCREA has released the latest mortgage rate forecast. The Bank of Canada raised the rates both in June and July due to a more brisk real estate market and inflation being hotter than expected in the spring. This has created a shift in expectations where it was thought that we may see rates come down in 2024 or 2025. Fixed rate mortgages have hit an annual high approaching 6%. Even though the economy is slowing inflation is still hovering around 3 to 4%. Inflation is not expected to return to a more normalized level until 2025.

To view the September 2023 Mortgage Rate Forecast PDF, click here.

For the complete news release, including detailed statistics, click here.

Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.

If you want to be kept informed on Kamloops Real Estate, News and more visit our Facebook Page.

To search for Kamloops real estate and homes for sale click here.

“Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

BCREA: Mortgage Rate Forecast for March 2023

BCREA released it’s latest Mortgage Rate Forecast for 2023. To view the March 2023 Mortgage Rate Forecast PDF, click here.

Highlights:

  • Economic uncertainty driving substantial volatility in Canadian bond markets.
  • Is the Canadian economy just slowing or something worse?
  • Inflation trending the right direction, will that be enough to keep the Bank of Canada on hold?

Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.

If you want to be kept informed on Kamloops Real Estate, News and more visit our Facebook Page.

To search for Kamloops real estate and homes for sale click here.

“Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

BCREA Mortgage Rate Outlook

BCREA released it’s latest mortgage rate outlook. Read below and link to full report is included below.

The average Canadian 5-year fixed rate has fallen to under 2 per cent, the result of a rapid and overwhelming policy response from the Bank of Canada to the COVID-19 pandemic. The Bank swiftly brought its overnight rate to its effective lower bound of 25 basis points and used the impressive scope of its balance sheet to counteract a nascent rise in credit spreads. Those measures, and those of its global counterparts, helped to forestall a potential repeat of the credit crisis that shocked the global economy over a decade ago.

The Bank’s foray into quantitative easing (QE), or the purchasing of bonds across the yield curve of short-to-long term maturities, and an injection of liquidity into the mortgage market have resulted in record-low Canadian mortgage rates. The average 5-year fixed rate now sits below 2 per cent and is just 165 basis points over the 5-year government bond yield, essentially in line with the long-term average.

While the average 5-year rate has come down considerably, the qualifying rate remains stubbornly high at 4.79 per cent. That rate has become notoriously divorced from its underlying benchmark in recent years and now sits at a spread of close to 450 basis points over the 5-year bond yield, or about 100 basis points higher.

With the Bank of Canada eschewing negative interest rates and providing forward guidance that it has
no plans to raise its policy rate until slack in the economy is absorbed, there is not much on the
horizon that may move mortgage rates one way or the other. We expect a mild rise in rates as the Bank
slows and eventually ends its QE, perhaps by the end of 2021. Studies show QE lowers long-term interest rates by 10-25 basis points, so we can anticipate a similar magnitude rise in 5-year rates when QE ends.

Click here to continue reading.

Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.

If you want to be kept informed on Kamloops Real Estate, News and more visit our Facebook Page.

To search for Kamloops real estate and homes for sale click here.

Bank of Canada Interest Rate Cut Expectations Tick Higher, Business News Network

Bank of Canada Kamloops Real Estate Mortgage Interest RatesThis article appeared on the Business News Network on January 14th, 2016 and was written by Fergal Smith of Reuters.

Bank of Canada interest rate cut speculation intensified on Tuesday as crude oil prices and the Canadian dollar both weakened to 12-year lows, with traders pricing in a full 25-basis-point easing by mid year.

The Canadian central bank cut rates twice in 2015 as an oil price shock drove the economy into recession in the first half of the year, but has been sidelined since July.

“People are calling for the Bank of Canada to cut rates at the next meeting,” said David Bradley, director of foreign exchange trading at Scotiabank.

The implied probability of a Bank of Canada rate cut at next week’s interest rate announcement has climbed from 22 percent after a speech by Governor Stephen Poloz last week to more than 30 percent, while the market has nearly fully discounted a rate cut in May.

The prospect of easing helped drive the yield on the Canadian government’s two-year bond to a four-month low.

Even so, “the market is underpricing the probability of a rate cut next week,” said Andrew Kelvin, senior rates strategist at TD Securities.

A Jan. 7 speech by Poloz had left investors doubtful he would cut Canada’s benchmark rate this month.

However, the central bank’s quarterly Business Outlook Survey has since found that business sentiment has deteriorated, while investment and hiring intentions have fallen to their lowest levels since 2009.

“It’s clearly going to be a very close call for the Bank of Canada given the financial turmoil we have seen,” said Kelvin.

U.S. crude oil prices have fallen an additional 8 percent this week, dipping below US$30 a barrel. Moreover, Western Canada Select, a blend produced by Canadian oil companies, trades at a greater than $14 discount to U.S. crude oil prices.

“We know falling oil prices have preceded both the last two cuts from the Bank (of Canada),” said Kelvin.

The central bank assumed a $45 price for U.S. crude oil prices when making its latest forecasts for the economy in October.

Speaking on Tuesday, Canadian Finance Minister Bill Morneau acknowledged that the public is concerned about the economy, but declined to indicate whether the government will stick to its budget deficit pledge or boost spending.

“We will be working in our budget to make sure that our initiatives help to grow the economy. We think the initiatives we already outlined are the appropriate initiatives to make a difference,” he said.

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