Home Prices and Lower Interest Rates in Around Town
The Bank of Canada is now less concerned about home prices spiking as it lowers the benchmark interest rate to 4.5%. The next interest rate decision is set for September 4.
Reaction in the housing market to the first two interest rate cuts in June and July has been somewhat muted. The deliberations show that resale activity has been “slower than expected” from the central bank’s point of view.
In making their decision, monetary policymakers paid particular attention to the inflation outlook and the broader Canadian economy, including the pace of immigration, wage pressures and the housing market. There had been concern sudden cuts to borrowing costs could drive home prices higher and risk progress made to date in taming inflation.
It is currently expected wage growth will cool, especially on the services side of prices, thanks to some slackening in the labour market. Unemployment has risen to 6.4 per cent, and the labour force will likely continue to grow faster than employment.
Overall, there is a consensus that if inflation continues current trends back to the two per cent target, rate cuts would be appropriate. Of particular concern is the risk in suppressing economic growth. BMO and CIBC are both calling for another 75 basis points of rate cuts in 2024.
Source: https://globalnews.ca/news/10686099
Building Links Construction Reports and Statistics: The weekly #1 construction projects resource for 30 years. New and updated projects, permits, tenders, and industry connections for Vancouver Island – Central North, West Coast and Powell River. Helping you build connections so you can build communities! Where are you getting your information from? Support local trades – Subscribe Now!
