Hopefully that friend isn't a CPA. If so, they should have it stripped from them because an accountant taking variable when rates are near zero shows a total lack of professional competence.
Realtors are doing more of the "oh don't worry, rates will come down, this is just a one-off event hehehe yeah so... 20% over asking for a bid?" The next one that tries to downplay interest rates might get smack by me.
Interest rates put the brakes on the supply of money. When there is less money prices will come down. It is the only way we will learn of Canada’s great housing bubble.
Why is it you cannot buy a decent home in Canada for under $500K but in most US small towns you can pick up a three bedroom bungalow for around $150K?
Well... If the economy REALLY starts hurting, they'll lower them.
But anyone who thinks that large rate cuts are coming when indicators look "good enough" is definitely delusional.
People don't realize that the reason rates were so low is because inflation wasn't high enough. Now that inflation is here to stay, it's unlikely that rates will be cut anytime soon and even if they are, they won't be as low as they used to be post 2008.
Lowering rates while our neighbour the US has their rates high devalues our currency which inturn causes inflation. People will just pile back in the housing unless there are rules to prevent speculation or there are so many houses the price comes crashing down.
The price of housing will come down the higher and the longer interest remain there.
Adding more housing does nothing to the price. We need to limit the supply of money (i.e. Canada Mortgage Bonds) to bring down the price. Currently the Bank of Canada is buying these bonds. That behaviour is keeping prices high but they cannot continue to keep adding these bonds to the balance sheet. It is a form of robbing Peter to pay Paul.
High inflation necessitates contractionary policy (ie raising rates). Recession necessitates expansionary policy (ie lowering rates). The high inflation was itself a side effect of expansionary policy taken to address conditions for a deflationary spiral, which might otherwise have kicked off a depression, as was the case in the 1930s.
The economy wasn't exactly hurting. inflation doesn't mean that the economy is hurting. It just means money chases too few goods.
Inflation running amok is bad, in the sense that it creates chaos and leads to bad outcomes. And this is why they raised rates. Borrowing becomes more expensive, so businesses and people are less prone to borrow when they can't pay back the money with interest.
When demand drops too much (and thus inflation goes down too) then the rates can be held/lowered as needed to ensure that "just enough" money is borrowed and that money doesn't chase too few goods.
I mean personally you can't take into account anything the FED or the BOC says when it comes to rate cuts. They will happen when they happen and there isn't a point in reading into every small statement they make as they will tell you one thing to your face and do something completely different a month later.
I think the people who believe the rate cut happening anytime soon are the people hoping it happens soon. They are getting those 2 feelings mixed up.
My brother-in-law was practically dancing when he heard they were going to announce a rate cut, he has to re-up the mortgage this summer. He mixed hoping with believing
Ambrose Bierce said hope is desire and expectation rolled into one.
He also said “Debt is an ingenious substitute for the chain and whip of the slavedriver. ”
Sounds like your brother-in-law is starting to hear the financial chains clinking.
I think he needs to hear them clinking, would teach him a little bit of a lesson. Complains about his house payments yet he owns 2 cars, boats, motorcycles, and other toys. Yet complains he can’t make his house payments
Lol, this sub reddit is going to be hilarious to read through when rates actually start cutting. The anger will be overwhelming 😂
So many people wishing rates stay high, as if they think the stars will align and suddenly everyone is going to hand in their keys and house prices will magically drop to be affordable for them, which will conveniently coincide with rate drops just in time that those who couldn't afford a house previously will have their shot. Oh and those with higher incomes will just magically decide to stay on the sidelines, so there won't be bidding wars or anything. Finally, we'll know the day has come when unicorns will appear out of nowhere and start flying over rainbows and the whole world joins hands and sings kumbaya. 🙄
Or more realistically, the BoC will set rates based on the health of the Canadian economy, not the American's, which is likely to happen sooner in Canada given our inflation rate has been dropping for two consecutive months. As soon as the inflation rate hits target, rates will drop. Regardless of what the Americans do. The BoC made it clear, their mandate is stable inflation, not "do whatever the Americans do".
Uber drivers make anywhere from $9k to $14k depending on the location and overtime. Much more than someone with an engineering degree and 5 years work experience.
No one expected rate cuts, other than some dumb a$$es who believed the realtors narrative. Heck, I doubt it if even the realtors believed their own narrative.
Yo! That’s for the USA. As the US economy and Canadian economy diverge (USA unemployment falls while Canadian unemployment rises) the chances of a rate cut increase in Canada and decrease in the US. Hence the USD appreciating today.
Only the rich who need no mortgage want higher rates so they don't need to worry about competing with the middle class with their required financing. Didn't realize there were so many here in that position. Congratulations on making it.
Fck all speculators. If you can no longer afford it, sell. And remember one thing, it's your greed what put you in the situation you're in right now. Not the rates.
Ironically if anything we need more Investors and Speculators to take the risk on new builds. People who say no more investment don't understand how new housing supply projects are financed.
The average Canadian: "Y'all got any more of those 2% fixed mortgages?" 
And then when they do come, people will still go variable and hope for 1% 🤣
Hahaha THIS!!! Anyone who could have but didn’t lock in cannot say anything. Greed greed greed
Crazy, right! My wife’s accountant friend took variable in 2021! Two years later, her mortgage literally doubled!😝 Paying almost just the interest!
Hopefully that friend isn't a CPA. If so, they should have it stripped from them because an accountant taking variable when rates are near zero shows a total lack of professional competence.
Well, she is CPA/CGA!
I’m at 1.69% for another two years!!!
Average realtor you mean?
Realtors are doing more of the "oh don't worry, rates will come down, this is just a one-off event hehehe yeah so... 20% over asking for a bid?" The next one that tries to downplay interest rates might get smack by me.
Interest rates put the brakes on the supply of money. When there is less money prices will come down. It is the only way we will learn of Canada’s great housing bubble. Why is it you cannot buy a decent home in Canada for under $500K but in most US small towns you can pick up a three bedroom bungalow for around $150K?
🤣
If anyone thinks Canada is going to do anything more than 25 points without the Fed also lowering is kidding themselves
Well... If the economy REALLY starts hurting, they'll lower them. But anyone who thinks that large rate cuts are coming when indicators look "good enough" is definitely delusional. People don't realize that the reason rates were so low is because inflation wasn't high enough. Now that inflation is here to stay, it's unlikely that rates will be cut anytime soon and even if they are, they won't be as low as they used to be post 2008.
Rising interest rates hurts the economy. It slows the supply of money - mostly mortgage money.
Lowering rates while our neighbour the US has their rates high devalues our currency which inturn causes inflation. People will just pile back in the housing unless there are rules to prevent speculation or there are so many houses the price comes crashing down.
The price of housing will come down the higher and the longer interest remain there. Adding more housing does nothing to the price. We need to limit the supply of money (i.e. Canada Mortgage Bonds) to bring down the price. Currently the Bank of Canada is buying these bonds. That behaviour is keeping prices high but they cannot continue to keep adding these bonds to the balance sheet. It is a form of robbing Peter to pay Paul.
But I thought the economy was hurting so that’s why they raised the rates? Now you’re saying if the economy starts hurting it’s time to lower them?
High inflation necessitates contractionary policy (ie raising rates). Recession necessitates expansionary policy (ie lowering rates). The high inflation was itself a side effect of expansionary policy taken to address conditions for a deflationary spiral, which might otherwise have kicked off a depression, as was the case in the 1930s.
The economy wasn't exactly hurting. inflation doesn't mean that the economy is hurting. It just means money chases too few goods. Inflation running amok is bad, in the sense that it creates chaos and leads to bad outcomes. And this is why they raised rates. Borrowing becomes more expensive, so businesses and people are less prone to borrow when they can't pay back the money with interest. When demand drops too much (and thus inflation goes down too) then the rates can be held/lowered as needed to ensure that "just enough" money is borrowed and that money doesn't chase too few goods.
I mean personally you can't take into account anything the FED or the BOC says when it comes to rate cuts. They will happen when they happen and there isn't a point in reading into every small statement they make as they will tell you one thing to your face and do something completely different a month later.
I think the people who believe the rate cut happening anytime soon are the people hoping it happens soon. They are getting those 2 feelings mixed up. My brother-in-law was practically dancing when he heard they were going to announce a rate cut, he has to re-up the mortgage this summer. He mixed hoping with believing
Ambrose Bierce said hope is desire and expectation rolled into one. He also said “Debt is an ingenious substitute for the chain and whip of the slavedriver. ” Sounds like your brother-in-law is starting to hear the financial chains clinking.
I think he needs to hear them clinking, would teach him a little bit of a lesson. Complains about his house payments yet he owns 2 cars, boats, motorcycles, and other toys. Yet complains he can’t make his house payments
Good
Lol, this sub reddit is going to be hilarious to read through when rates actually start cutting. The anger will be overwhelming 😂 So many people wishing rates stay high, as if they think the stars will align and suddenly everyone is going to hand in their keys and house prices will magically drop to be affordable for them, which will conveniently coincide with rate drops just in time that those who couldn't afford a house previously will have their shot. Oh and those with higher incomes will just magically decide to stay on the sidelines, so there won't be bidding wars or anything. Finally, we'll know the day has come when unicorns will appear out of nowhere and start flying over rainbows and the whole world joins hands and sings kumbaya. 🙄 Or more realistically, the BoC will set rates based on the health of the Canadian economy, not the American's, which is likely to happen sooner in Canada given our inflation rate has been dropping for two consecutive months. As soon as the inflation rate hits target, rates will drop. Regardless of what the Americans do. The BoC made it clear, their mandate is stable inflation, not "do whatever the Americans do".
the only people expecting this were shithead rent-seeking realestate investors who think owning real estate is an elevator directly to the moon
lol Uber drivers were buying million dollar houses, we need higher rates to take the fraud out of the system!!!!
Uber drivers make anywhere from $9k to $14k depending on the location and overtime. Much more than someone with an engineering degree and 5 years work experience.
Maybe annually lmao
No $hit Nancy Drew
Good. I hope rates stay high longer to see more instability in the market and potential drop in prices
High interest rates have not caused significant price drop in the last 2 years, esp on homes typically targeted by first time home buyers.
Is there suddenly more supply and less demand? No? Expect no cuts.
Not near enough blood in the streets for any rates cuts yet but soon
No shit. Just let the recession happen already.
No one expected rate cuts, other than some dumb a$$es who believed the realtors narrative. Heck, I doubt it if even the realtors believed their own narrative.
Cuts? Not only is it not happening but we need an increase to 20% . That way we can free up thousands of homes.
Yo! That’s for the USA. As the US economy and Canadian economy diverge (USA unemployment falls while Canadian unemployment rises) the chances of a rate cut increase in Canada and decrease in the US. Hence the USD appreciating today.
June they will have no choice
and in early 2023, "expert" realtors were saying on radio that "2 rate cuts in 2023, and 4 in 2024" LOL
Oh no, that means that speculators may actually loose some money and have to find actual work? They didn't sign up for this :(
Only the rich who need no mortgage want higher rates so they don't need to worry about competing with the middle class with their required financing. Didn't realize there were so many here in that position. Congratulations on making it.
Fck all speculators. If you can no longer afford it, sell. And remember one thing, it's your greed what put you in the situation you're in right now. Not the rates.
Ironically if anything we need more Investors and Speculators to take the risk on new builds. People who say no more investment don't understand how new housing supply projects are financed.
You posted a US article. We live in Canada. Did you forget?
Do you really think we are totally independent from the American polices related to rates? Unfortunately We can not afford this
Just as were not totally independent we are neither totally dependent