WHY THE WEAK ECONOMIC DATA?

In short: it means the rate hiking cycle by we’ve been experiencing is now finally biting the broader economy. (Of course, we have already been feeling the effects in the Real Estate industry!) 

In General, once a rate hiking cycle begins it takes up to 18 months for the effects to filter through the economy, and we are now rolling into month 20 since the BoC started hiking rates. 

So, what does this all mean for the Canadian Real Estate Market?

In response to soft economic data, the market has been reacting dramatically with Bond Yields crashing. This is especially important to the RE industry as Bond yields move FIXED rate mortgage pricing!

Basically: Bond Yields Falling = Fixed Mortgage Rates Falling.

What We're Doing at THRIVE:

• We're actively requesting, and successfully securing rate drops for our clients on existing approvals.

• Reconnecting with clients whose rate-holds have expired to offer them these new, lower rates.

• Discussing with clients the best mortgage terms for their situation, and offering how to play a potential change in interest rate direction.

Nothing but Good News for Buyers:

The recent shift in the mortgage market is welcomed news for those considering buying a home. Timing the market is nearly impossible, however, if you have been on the fence about making a move, the future looks a bit brighter today than it has over the last ~6 months. Rate drops have started across many of our lending partners, so if you are kicking tires about a purchase - get in touch to get a feel for mortgage pricing. 

As they say: "Marry the home, date the rate"

NARRATIVE CHANGE? 

 If you’re still reading along (thank you!)

I will leave you with this: After nearly 2 years of Media reporting Interest Rates were headed to the Moon, this recent bevy of economic data has seemed to change the tune of the media. And while 2-3 weeks is not officially a trend, check out the headlines over the last few days: 

(Click the headlines to view the articles) ⬇️

'Canada’s Central Bank Will Have To Cut Interest Rates Faster and Further Than Markets Expect'

• “The Bank of Canada will be forced to cut 2 percentage points from its policy rate over the next 12 to 18 months.” 

'The Market Is Wrong' on Rate Cut Timeline:' (eg cuts to happen sooner)

• “(The Bank of Canada) actually should be thinking about cutting rates, but it’s hubris that’s preventing them from doing that,” he added. In this economic environment, Rosenberg believes the Bank of Canada will need to act fast. “Rates are going to be coming down much more quickly and forcefully than the markets (have) priced in right now,” he warned. 

Mild recession could quickly get worse without rate cuts: experts

• "...  if the current economic trends continue, interest rates could start to come down during the first quarter of next year.”

Macklem says Bank of Canada could cut rates before inflation reaches target

• “..“We would love to be surprised and find out that we were too pessimistic and we’re able to bring rates down sooner. … We will look forward as much as Canadians to getting interest rates back to a neutral level.”

Thanks for reading along, as always: Please feel free to drop me a line, text, or email with any questions or comments! 

Best regards,