The Bank of Canada is expected to keep its key interest rate unchanged at 2.75% when it meets on Wednesday. This decision comes after recent economic data showed stronger-than-anticipated inflation and growth in the first quarter of 2023.Canada's GDP grew 2.2% in Q1, while inflation fell to 1.7% in April. That said underlying price pressures remain elevated, with the Bank's preferred core inflation measures accelerating.
The impact of ongoing U.S. tariffs on Canadian exports is expected to be felt more strongly in the second and third quarters. This, combined with signs of weakness in the labor market, is why some economists believe a rate cut is still likely, even if it doesn't come at this week's meeting.
The continued trade uncertainty makes it difficult for the Bank of Canada to set policy and provide clarity on the path of interest rates going forward. As one economist noted, "it's unfortunate that they have to adjust and make decisions in a period of time where it's highly uncertain."
Overall, while the Bank is expected to hold steady this week, the consensus view is that rate cuts are likely on the horizon as the central bank aims to support the Canadian economy in the face of ongoing trade risks and the potential for a slowdown.
What does this all mean for the real estate market? Normal. Rates are still excellent, considered excellent for buyers. You can expect a 5-year insured Fixed-rate mortgage ranging between 3.94% to 5.24%. At the same time, variable rates start at 4.04%. These rates are for insured mortgages, which are typically required when purchasing a home with less than a 20% down payment.
The key takeaway is that while the Bank of Canada looks like they are holding steady on rates for now, the mortgage environment is still quite positive overall. Buyers can still access excellent fixed and variable rate options, providing some reassurance in the current economic climate.
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If you are looking to either Buy or Sell, contact me at 705-927-6236
Brad Sinclair, Sales Representative
Team Lead at The Brad Sinclair Team
Royal Heritage Realty
Your inside source to cottage country
Not intended to solicit clients under contract
If you are looking to either Buy or Sell, contact me at 705-927-6236
Brad Sinclair, Sales Representative
Team Lead at The Brad Sinclair Team
Royal Heritage Realty
Your inside source to cottage country
Not intended to solicit clients under contract
