I want to start by thanking my usual sources of information Chief Economist for DLCG Dr. Sherry Cooper,  RMG Vice President of National Sales – Bruno Valko,  and our friends at TD Economics.

The US and Canadian Economies seem to be diverging on two different paths.

The US is in an election year and everyone is laser-focused on the economy, seemingly out-performing expectations.  The US is posting higher-than-expected jobs and their inflation rate came in higher than expected.  In Canada, we received some good news on Tuesday when our inflation rate was lower than expected at 2.9% vs the 3.0% expectation.
Let’s examine our Canadian numbers:

2.9% – Inflation Rate Year-over-year
2.4% – Core Inflation Rate Year-over-year
-0.3% –  Inflation Rate Month-over-month

Groceries I think we are all noticing prices are pulling back down to 3.4% year-over-year down from 4.7% in December.   When I go to Costco, I notice that everything is “on-sale” back down to what their regular prices used to be.  It’s a good anecdotal sign!
To all the sun-seekers, your vacation prices are coming down.   Our shelter costs are still very high propped up by ridiculous housing policy and high interest rates.

The US economy doesn’t show many signs if any of slowing down.  In Canada we are lagging badly, even the Prime Minister is hoping for the Bank of Canada to start reducing rates.  We are directly affected in Canada by the US economy.   The 10-year US treasury yield is directly correlated to our 5-year Canada bond yield which we determine our fixed-rate mortgages.

So if Canada is lagging and the US is surging, what does this mean for people like myself who are renewing their mortgage this year?

We don’t know. However when I asked my magic 8-ball this morning “Will mortgage rates come down this year?”, I flipped it over to a pleasant “All signs point to yes”.

If you are purchasing a new home, renewing your current mortgage or planning on refinancing, having a discussion and making a plan that is suitable to your own situation.

We would love to help!