Wednesday, July 21, 2010

Mortgage Rates Update

By now we have all heard that the Bank of Canada has raised the interest rate another quarter point. It was in the paper early this morning. The prediction is that it will go up some more by the end of the year.

As I have been telling my buyers, this is an opportune time to purchase a home and still get a great interest rate. Do this before rates go up some more. There are plenty of homes on the market so there is choice. With many enjoying the holiday season and all the activities that come with the summer, it may be a good time to sit down and chat with me about a home purchase, or even the sale of your existing property.

The following article was provided to me by Kristian Harris of Monster Mortgage, an independent Mortgage Broker.

"The Bank of Canada Tuesday raised its benchmark lending rate for the second consecutive month while cutting its forecast for economic growth over the next two years because austerity measures in Europe and economic fits and starts in the United States will make for a slower global recovery and a “more gradual” Canadian rebound.

In the statement on its decision to lift the overnight rate by one-quarter of a percentage point to a still low 0.75 per cent, Bank of Canada Governor Mark Carney and his rate-setting panel reiterated that future moves will largely depend on developments around the world and, in turn, how they may impact Canada’s export-heavy economy.

Canada’s economy will grow at a 3.5 per cent annualized pace this year instead of the 3.7 per cent rate that policy makers projected in April, and 2.9 per cent next year instead of 3.1 per cent, the central bank said. The following year, however, the domestic economy will grow at a 2.2 per cent pace instead of the 1.9 per cent predicted in April.

A flurry of belt-tightening measures in Europe have lowered the risk of an ``adverse outcome’’ to the continent’s debt crisis and raised prospects for ``sustainable long term growth,’’ but will slow the worldwide turnaround, the central bank said. Also, in the United States, Canada’s main export market, the bank said private demand is ``picking up but remains uneven.’’

The revisions -- which will be explained more in a new forecast that the central bank will release on Thursday -- are due to ``a slightly weaker profile’’ for global growth but also to ``more modest consumption’’ domestically as the housing market cools, government stimulus spending runs out and business investment remains tepid, the bank said.

``Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments,’’ the central bank said, using identical language from its statement on June 1, when it became the first in the Group of Seven to raise borrowing costs since the recession.

Investment by Canadian companies ``appears to be held back by global uncertainties’’ and hasn’t bounced back from a sharp drop during the recession even as many firms are hiring, the central bank said. Without being more specific, policy makers said that over their projection period they anticipate business investment and net exports will make a ``relatively larger’’ contribution to economic growth -- a hint that the domestic consumption that powered Canada’s economy out of the recession can’t be relied on as much to fuel the recovery going forward.

Inflation will stay near the central bank’s 2-per-cent target throughout the projection period, policy makers said, but the economy won’t return to full capacity until the end of 2011, or six months later than they had forecast in April."

Thank you, Kristian, for your insight and for the speed at which you provided this to me.

If you have any questions regarding your finances, contact Kristian. For all your Real Estate needs, call me, Betty, directly at 416 427 1875. Let me help you get into a new home or sell your existing house.

Betty Bartusevicius, Sales Representative
RE/MAX Realty Specialists Inc., Brokerage
905 828 3434
Fine Homes In 905
416 427 1875

Providing you with honesty and integrity, qualities you deserve from your Realtor.

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