Categories for Economic Analysis

Rates to Stay Low as Jobs Won’t Recover for a Decade: CBO

—The Mortgage Report: July 3— Long Road Back for Jobs: Avid rate watchers all want to know the same thing: how long will unemployment stay elevated? The answer to that is essential to knowing how long rates could remain in a trough. On Thursday, we got a sobering projection from a reputable source. The non-partisan Congressional Budget Office (CBO) says...

CMHC Bearish on Home Prices, But…

—The Mortgage Report: June 23— Prices Will Fall, Unless They Don’t: “Short-term uncertainty will lead to severe declines in sales activity and in new construction,” CMHC reported Tuesday. “House prices will fall as well and are unlikely to recover over the horizon of this report (through 2022).” But that statement is a tad general. It would be a mistake to...

One of Three Things Must Occur for Record Low Mortgage Rates

The Mortgage Report – May 31 And One of Them’s Bad: If you’re rooting for lower mortgage rates, one of the following must happen: Bond yields must drop to record lows Bond yields steer fixed mortgage rates and are largely a reflection of Canada’s economic (inflation) outlook Rooting for economic pain—so mortgage rates fall—isn’t exactly a patriotic sentiment, so we’d...

Ominous Data From CMHC

The Mortgage Report – May 19 5% Down Payments at Risk? Canada’s housing agency says it must “avoid exposing young people” and “taxpayers” to “amplified losses that result from falling house prices.” CMHC CEO Evan Siddall said today, “Unless we act, a first-time homebuyer purchasing a $300,000 home with a 5% down payment stands to lose over $45,000 on their...

Historically Bad Housing Numbers

Mortgage Report – Weekend Edition Prices Tumble in April: The national average home price in Canada has plunged almost 10% in one month (April). That’s never happened before in CREA data going back to 1980. The next closest month-over-month drop was -7.6% in April 1989. The data was skewed partly by the GTA’s 11.8% nose-dive. Home Inventories Skyrocket: The total...

Stress Test Rate to Drop Next Week

Mortgage Report – May 14 De-Stressing: Call out the marching band, BMO’s posted 5-year rate cut today should ease the government’s mortgage “stress test,” effective next week. As it stands, the minimum stress test rate will likely fall from today’s 5.04% to 4.99%. It’ll mark the first time since January 2018 (when OSFI’s stress test began) that this benchmark rate...

The “News is Getting Better” Edition

Daily Mortgage Report – May 8 Unemployment Surprise: Unemployment is a key determinant of home prices. And while it may seem hard to put a record 2 million lost jobs (StatsCan’s estimate for April) in a positive light, when economists were predicting double that amount, it’s a relief. Canada’s unemployment rate surged to 13%, near the highest in modern data...

The “I Wish We Had Better News” Edition

Daily Mortgage Report – May 7 A Record 4 million: That’s how many jobs disappeared in April, predict economists surveyed by Bloomberg. That’s a stunning one-fifth of the labour force, and only a portion of those jobs will return soon. How many of these families own homes? A meaningful minority. But the bigger question is, how many will continue paying...

Valuation Trouble

Daily Mortgage Report – May 5 Trap Door for GTA Home Values: The average home price in the Greater Toronto Area fell a startling 11.8% versus March (those details). And Toronto’s drop wasn’t alone. Among the larger cities reporting April prices, Ottawa fell 6.8%, Calgary was down 5.3% and London dropped 5.4%. Vancouver is holding up for now, at basically...

Daily Mortgage Report – April 27

Today’s Rate Menu: After a three-week hiatus, variable mortgage rates are back down to prime – 0.50% (a 1.95% effective rate, including cash back) in some provinces—but only if you need a default-insured mortgage. The lowest widely advertised uninsured rates remain HSBC’s 2-year fixed at 2.34% and the fully open Tangerine HELOC at 2.35%. Sales Should Surge Post-Reopening: Home purchases...