As mortgage broker with BRX Mortgage it is my responsibility to break down what is exactly happening in todays market. Ill be honest, so many in the biz don't really know. I am going to try and make it simple because it really isn't that simple to understand for most of us. First I would like to remind you I proudly serve all of British Columbia and Ontario I also am fully virtual so you never have to leave the comfort of your home to get the market information or mortgage help you need. Let's jump feet first into it all together. As we navigate the current economic landscape, it's crucial to stay informed about how broader financial trends impact the housing market, particularly if you’re considering buying a home or refinancing your mortgage.
Canada’s Economic Growth Lags Behind the U.S.
In the first quarter of 2024, Canada’s economy grew by just 0.5%, a stark contrast to the nearly 3% growth seen in the U.S. Despite similar interest rates set by the Federal Reserve and the Bank of Canada, this discrepancy highlights that slow economic growth and sluggish housing numbers cannot be attributed solely to high interest rates. To reignite the economic and real estate dynamism we’ve enjoyed over the past two decades, Canada needs more proactive policymaking and leaders who prioritize economic growth. This is key to remember when it is time to vote. Make sure you take the time to have your voice heard.
Ontario’s Fiscal Stimulus: A Step Towards Stability
Ontario’s government recently provided an update on the province's economic outlook, and the news is cautiously optimistic. The 2024–25 First Quarter Finances report revealed that Ontario’s economy grew by 0.7% in Q1 2024, surpassing the national average. This growth was driven by higher exports and increased household spending. Despite ongoing global uncertainties, Ontario’s fiscal outlook remains steady, with the government maintaining its projected deficit and revenue figures for the year. This stability is essential for supporting Ontario families, workers, and businesses, helping to create good-paying jobs and high-quality services.
When Will U.S. Interest Rates Fall?
The Federal Reserve's next meeting in September 2024 could bring discussions of interest rate cuts. After keeping the federal funds target rate at 5.25% to 5.5% since July 2023, the Fed has hinted at potential reductions by the end of this year. While inflation has moderated, the Fed is still waiting for more positive data before making a move. When rate cuts do happen, they’re likely to be gradual, which could take several years to significantly impact mortgage rates.
For homeowners, this means that while lower mortgage rates might be on the horizon, the changes will likely be slow. It’s important to stay informed and consider your options, especially if you’re currently locked into a higher rate.
National Homebuilding Figures: Stability Amid Decline in Ontario
The latest data from the Canada Mortgage and Housing Corporation shows a stable rate of housing starts nationwide, with 245,708 homes started in Q2 2024. However, Ontario has seen a notable decline in housing starts, with a 7.0% drop from the first quarter and a 26.0% decline year-over-year. This downturn is particularly significant given Ontario’s past dominance in national housing starts. The high cost of homes in the Greater Toronto Area is a major factor, making it more difficult for developers to justify new projects.
In contrast, regions with more affordable housing have seen increases in starts. Quebec, the Prairies, and the Atlantic provinces have all experienced significant growth in new home construction.
What Does This Mean for You?
If you’re a homeowner or considering entering the market in BC or Ontario, these trends underscore the importance of timing and strategy. The current economic environment is complex, with both risks and opportunities. Whether you’re thinking about refinancing, buying your first home, or simply want to stay informed, I’m here to help you navigate these challenges and find the best solutions for your mortgage needs.
Stay tuned for more updates and insights as we continue to monitor these developments. If you have any questions or need personalized advice, don’t hesitate to reach out. Together, we can make sure you’re positioned to make the most of the opportunities ahead. www.emilycallme.com
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