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14 Feb

State Of The Rate: Febraury 14th, 2024 Broken Hearts On The Horizon


Posted by: Peter Paley

Yesterday, the US released economic data, which is already negatively impacting Canadian fixed mortgage rates.

US inflation numbers were 3.1%, which is above market expectations of 2.9%.  Core inflation also remains stubborn and it ticked up from 0.3% to 0.4%.   Immediately we saw our bond yields increase.  The 5-year Canada Bond Yield opened this morning at 3.79% (Remember the 5-year fixed rate mortgage rate will usually be priced 1.5%-2% over the yield).  The higher bond yields mean tighter margins for mortgage lenders and increases will most likely be coming today and tomorrow (Feb 14 and 15th).

Last week Statistics Canada Labour Force Survey is starting to show signs of increasing immigration.  Full-time jobs increased by 37,300 and part-time jobs increased by a whopping 48,900.   Many of the jobs are in the public sector and many were in the service sector.  The working-age population increased by 125,500 or 1,000,000 people year-over-year.  ONE MILLION PEOPLE! *insert Dr. Evil laugh here*

Canada is challenged.

1. Population explosion.
2. Housing shortage.
3. Interest rates are being dragged up by a hot US economy.
4. Terrible mortgage policy for over 12 years.
5.  Infrastructure concerns (schools, roads, services, transportation, health)
6.  Wages are up over 5% year-over-year.

I’ve been saying this for quite a while now that I think any rate decreases are going to be slow and steady barring the occurrence of a major calamity (financial, health, war, weather).  This early rate reprieve may be coming to an end.  It is a great time to call us for a 2nd opinion on your existing mortgage.  If you are going to purchase this year, it’s an even better time to get pre-approved and lock your rate in!

If you made it this far, contact us right now and we will be happy to answer your questions.

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