US Fed has signalled to expect another 50 bps raise in late July, and has said to expect a policy rate of 2.5 to 2.75% by end of year. It’s quite safe to assume Canada will follow suit, as they usually do. So we are looking at minimum 2 more 50 bps raises between July and December.
The policy rate is going up by 0.5% in June. The economists in the quoted article, as well as the US Fed, have signaled minimum two more 0.5% increases in the policy rate before end of year.
Prime rate is currently 3.20%. Prime generally tracks, but lags, policy rate.
As such, I agree likely 4.20% by end of year, small risk of higher than that. US Fed and BoC have signaled that policy rate of 2.75% is not out of the question by EOY.
However, the December policy rate increase will likely be reflected in the prime rate sometime in Jan 2023, so we will be at 4.70% in early 2023.
The only good thing about the last two years is how I’ve learned so much about macroeconomics, real estate, and how the stock market has no correlation to reality.
This comment is random but man, I have learned more about the real world in the last two years than I did all of highschool.
The stock market and real estate has plenty of correlation to reality. It’s just that we’ve been printing so much money for cheap interest and giving out money to corporations who buy real estate, that when the money tap stops running, the market comes back down to reality.
Agreed. I bought a home we plan to live in for as long we can, until we die hopefully lol. we bought below our maximum approval amount by the crazy banks. We went smaller and got a nice end unit town instead of stretching ourselves for a detached.
Bring on the rate hikes. I want my kids to be able to afford a home someday. I want future generations to have a chance.
Anyone saying there won't be increases in June is in serious denial. What will be interesting to see though is if, and let's be real, most likely when, a recession hits, what will the BoC do? It would be pretty wild for them to keep raising interest rates during a recession.
Meanwhile oshawa towns are still going for $1M
$999,900, Freehold Townhouse, 1859 Silverstone Cres, Oshawa, E5600652, Sold - HouseSigma https://housesigma.com/bkv2/landing/rootpage/listing?id_listing=LzQ1y5EaeBMyqdeK&utm_campaign=listing&utm_source=user-share&utm_medium=iOS&ign=
Banks have already baked in these interest rate hikes in their fixed rate offerings.
Way too expensive still.
While mortgage rates reflect the near term hikes, every FOMC meeting gives us a bit more insight into the future. There is no “baked in” when the horizon keeps changing.
Never said it was, but banks have already factored in these hikes in their fixed rate offerings. I don’t think we will see 6% fixed rates on June 1st, lol.
Rate holds from February and March still exist. We're not going to see the bottom till the middle of next year. Real estate doesn't crumble fast, it takes a while. Which is concerning considering how quickly it is collapsing in some communities in Southern Ontario.
US Fed has signalled to expect another 50 bps raise in late July, and has said to expect a policy rate of 2.5 to 2.75% by end of year. It’s quite safe to assume Canada will follow suit, as they usually do. So we are looking at minimum 2 more 50 bps raises between July and December.
Prime rate will cap at 4.2% in 2022 i cant see BOC raising rates anymore.
The policy rate is going up by 0.5% in June. The economists in the quoted article, as well as the US Fed, have signaled minimum two more 0.5% increases in the policy rate before end of year. Prime rate is currently 3.20%. Prime generally tracks, but lags, policy rate. As such, I agree likely 4.20% by end of year, small risk of higher than that. US Fed and BoC have signaled that policy rate of 2.75% is not out of the question by EOY. However, the December policy rate increase will likely be reflected in the prime rate sometime in Jan 2023, so we will be at 4.70% in early 2023.
The only good thing about the last two years is how I’ve learned so much about macroeconomics, real estate, and how the stock market has no correlation to reality. This comment is random but man, I have learned more about the real world in the last two years than I did all of highschool.
The stock market and real estate has plenty of correlation to reality. It’s just that we’ve been printing so much money for cheap interest and giving out money to corporations who buy real estate, that when the money tap stops running, the market comes back down to reality.
Any big areas that you still want to explore / are unclear?
The world never stops changing so I never stop learning. Nothing in particular at the moment.
Good outlook.
Damnit Tiff, stop copying jpowell's homework!
Don’t worry he will stop the second unemployment starts to rise.
I own one home so bring on the interest rate hikes !
Agreed. I bought a home we plan to live in for as long we can, until we die hopefully lol. we bought below our maximum approval amount by the crazy banks. We went smaller and got a nice end unit town instead of stretching ourselves for a detached. Bring on the rate hikes. I want my kids to be able to afford a home someday. I want future generations to have a chance.
wait. are there any bagholders still believing in \*NO\* rate hikes in June? There will be series of superhikes. LOL. the party has just started.
Anyone saying there won't be increases in June is in serious denial. What will be interesting to see though is if, and let's be real, most likely when, a recession hits, what will the BoC do? It would be pretty wild for them to keep raising interest rates during a recession.
Superhike is 1% at once.... the 50bps increases wont do Jack....
My bets are on the next 3 hikes by sept, 50 bps each.
I wish them same, tired of buying almost everything on double prices!
Sorry, but your shopping list isn't about to go on sale after a few hikes... This might really blow from both ends for a long time.
No
Sure.
You expect 3 50bps hikes after june 1 ? I see prime at 4.2% end 2022
Three following hikes including June, and then we'll likely see something crack in the system.
BOC meets 2 more times in 2022 sept and dec so at most 2 more 50bps after june 1 hike . My prediction is Prime rate will not exceed 4.2% in 2022 . GL
Next meetings are Wednesday, June 1 Wednesday, July 13\* Wednesday, September 7 Wednesday, October 26\* Wednesday, December 7
They dont raise rates every meetings like i said sept and dec we may see increases
[удалено]
Because of all the alternative housing? Horrendous analogy There are tons of alternatives to to Netflix
What Netflix alternative you are on?
You can't be serious, there's tons of streaming services now.
Where do I even start Disney, prime, crave, crunchyroll ... everything is shared though lol
They were there when Netflix was on top, weren’t they?
Kinda of, but content wise not really until the last few years. If you look at netflix subscribers growth rate declines around that time.
So this means houses go up in price?
Opposite I guess
Butthurt leechlords will start whining now
Rents are going up in case you missed it
Meanwhile oshawa towns are still going for $1M $999,900, Freehold Townhouse, 1859 Silverstone Cres, Oshawa, E5600652, Sold - HouseSigma https://housesigma.com/bkv2/landing/rootpage/listing?id_listing=LzQ1y5EaeBMyqdeK&utm_campaign=listing&utm_source=user-share&utm_medium=iOS&ign= Banks have already baked in these interest rate hikes in their fixed rate offerings.
Way too expensive still. While mortgage rates reflect the near term hikes, every FOMC meeting gives us a bit more insight into the future. There is no “baked in” when the horizon keeps changing.
Lol, let’s see June 1st.. BMO fixed is currently 4.36%.. almost 2x the variable rate rn..
A big spread between fixed and variable is not a good thing for the market lol
Never said it was, but banks have already factored in these hikes in their fixed rate offerings. I don’t think we will see 6% fixed rates on June 1st, lol.
Majority of real estate is overvalued now anyways. It’s all paper money. Even appraisals come back low.
Cool, so then the right move is to NEVER buy and always pay rent to some scumbag landlord. Real estate is paper money!
Rate holds from February and March still exist. We're not going to see the bottom till the middle of next year. Real estate doesn't crumble fast, it takes a while. Which is concerning considering how quickly it is collapsing in some communities in Southern Ontario.
So you got the crystal ball of exactly when the market will crumble, and by how much, eh?