A month ago, I said Fixed mortgage rates probably hit the bottom. A week later, fixed mortgage rates started to go up… around 0.20% over the past 3 weeks. Variable rate mortgage pricing has gone from Prime less 0.65% to Prime less Prime less 0.40%.
Now, here’s the thing…. I don’t think rates will skyrocket over the next 6 or 12 months, like the pessimists would have you believe. I think mortgage rates hit the bottom….BUT, they probably won’t go up very quickly.
In fact, the forecast now is for the Bank of Canada rate to stay the same until 2017. This is just another example of how the world has become a smaller place. If someone sneezes in Germany, we catch a cold. With most of the global economies just getting by, there isn’t much reason for mortgage rates to go crazy. They should remain low.
The key driver for rates going up recently is nothing more than profit taking. Banks have had a great year… In case you didn’t know. That’s right.. we seem to forget that 2015 was one of the best years on record for real estate and mortgage volume… and house prices have never been higher. Funny how that seems to get lost in the media reports.
Look for Variable rate pricing to fall in the new year… Fixed rates could also come down slightly, but don’t count on them hitting the record lows that we saw this summer. Hey, that’s not to say rates are bad. We are still well under 3.00%. These are ridiculously low mortgage rates. Enjoy them while you can.
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Steve Garganis 416 224 0114 firstname.lastname@example.org