The entire mortgage market was waiting, and now, after 10 months, it finally happened. Canada’s 5-year bond yield (which influences fixed mortgage rates) broke through major resistance, resistance that goes all the way back to April of last year. It’s a signal that better economic times lie ahead. A sign that inflation should no longer be just an afterthought. A...
—The Mortgage Report: June 19 — Long-term Money on Sale: If you’re willing to commit to a decade-long term, and you live in Ontario, you can now do it for less than at any time in history. 10-year fixed rates are now as low as 2.79% (an effective rate including cash back) for well-qualified borrowers in Ontario. Outside of Ontario,...
The Mortgage Report – May 20 “1″-handle Rates Return: Fixed rates have once again dipped below the psychological 2% level, albeit only three-year fixed rates. It’s a threshold that, when broken, often creates incremental demand for mortgages. Normally that demand comes from refinances and purchases, but with home sales down 57% nationwide, purchases have largely dried up. Credit tightening, a...
Mortgage Report – May 12 Not So Timely: The government’s 5-year bond yield, which heavily influences fixed mortgage rates, peaked in October 2018. Since then, it has collapsed 212 basis points. Meanwhile, big banks have lowered 5-year posted rates just a stingy 30 basis points. The banking regulator (OSFI) considers that a problem and proposed to de-link the mortgage stress...
Daily Mortgage Report – May 5 Trap Door for GTA Home Values: The average home price in the Greater Toronto Area fell a startling 11.8% versus March (those details). And Toronto’s drop wasn’t alone. Among the larger cities reporting April prices, Ottawa fell 6.8%, Calgary was down 5.3% and London dropped 5.4%. Vancouver is holding up for now, at basically...
9:09 p.m. Update Southbound Fixed Rates: Lender after lender has announced fixed-rate drops this week. And with Canada’s 5-year yield closing at a record low today, it’s no coincidence. It was the first time ever that our 5-year bond closed below 0.40%. Prerequisite for Recovery: “…We need monetary stimulus to reach the ultimate borrower,” said BoC chief Stephan Poloz today....
Cracks in Real Estate: Home sales have plunged. No secret there. But new data from HouseSigma gives us a hint of how much, at least in the Greater Toronto Area. Raw year-over-year sales data shows that during the first three weeks of April, GTA home sales have nosedived from 11,777 to just 4,027, down roughly 66%. And properties for sale...
Oil Bloodbath: Crude posted its largest price decline in history today, down 300% in the May futures contract. How is it possible to fall more than 100%? Oil futures traded below $0 a barrel for the first time in history. People weren’t even willing to take a barrel of oil (for May delivery) for free. The June contract was down...
Crude Unreality: Oil dove to its cheapest level since 2002 on Friday, closing at a staggeringly low $18.27 a barrel (WTI). Three months ago, the lowest analyst forecast for 2020 was $50! Given how important the black stuff is for Canada’s economy, its collapse should add downward pressure to bond yields—which are a leading indicator of fixed mortgage rates. Oil...
Significant rate catalysts often come out of left field. Case in point: collapsing Canadian oil prices. Check out this chart below. It shows Canadian oil (a.k.a., Western Canada select, or “WCS“) rapidly cheapening versus higher-demand “WTI” oil from the U.S. This is arecord discount. Its thickness, inferior quality and delivery challenges mean Canadian oil always trades at a discount to...
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