What this week’s bond market chaos could mean for Canadian mortgages
The worsening rate outlook is looming large for homebuyers and owners as the fall market comes into view, according to Toronto-based Tango Financial mortgage agent and realtor Victor Tran (pictured top).
“Fixed mortgage rates have been climbing and now the forecasts for the prime rate will probably [rise] – because it’s not looking too good,” Tran told Canadian Mortgage Professional. “It’s likely going to be increasing sooner than we expected.
“It’s all tied to the ongoing tension and trade war with the US. So that’s certainly starting off the fall slower than expected. Typically, the spring market is the best time to sell and then the fall market is the second best, but it’s definitely starting from a slower pace.”
Canada’s housing market faces yet another challenge
That oil price volatility has clouded the Canadian housing outlook since the end of February, while the beginning of a potentially punishing US-Canada trade war in August may also have given some prospective homebuyers pause as they weigh a move.
The recent rise in bond yields and borrowing costs marks just the latest twist for buyers and could move a hoped-for housing recovery even further back.
