Mortgage Minute: Conflicting Signals, a Jobs Shock, and What the Budget Didn’t Fix

Welcome to your Mortgage Minute. It was a confusing week for the Canadian economy, and it has major implications for your mortgage strategy.

We saw two completely conflicting stories. The first was a blockbuster jobs report that signals economic strength. The second was a continued stream of data showing that the housing sector is in a deep slowdown, and households are struggling.

This market of contradictions is the new reality. Here’s what you need to know.

The Job Shock: An End To Rate Cut Hopes

• On Friday morning, the market was expecting a weak jobs report. Economists had predicted a loss of 20,000 jobs, which would have confirmed the Bank of Canada’s recent rate cut was justified.

  Instead, the economy added a shocking 67,000 jobs, led by 55,000 in Ontario. This display of strength makes further Bank of Canada rate cuts very unlikely.

The On-the-Ground Reality

But are these job numbers telling the whole story? Not according to new reports on household finances. A new survey shows that 46% of Canadians are dipping into their savings just to cover daily expenses.

Here in Toronto, the data is even more specific. A new Statistics Canada report found that 32.3% of households in the city are struggling to meet their financial needs.

The Budget’s “Narrow” Fix for Housing

This brings us to the new Federal Budget. The housing industry was looking for a powerful solution to the ongoing construction slowdown.

While the budget included some good news—like the cancellation of the carbon price and a drop in the lowest federal income tax rate from 15% to 14%—the housing measures fell short.

Industry leaders are warning that the new GST rebate, which is limited to first-time buyers, is “too narrow” and won’t be enough to stimulate the new-build market.

The Most Important Data Point of the Week

If you want proof of this economic disconnect, here it is:

While the wider economy gained 67,000 jobs last month, the construction sector lost 15,000.

The housing sector is in its own recession, separate from the services economy. The industry’s expert opinion is that this new budget does not provide the incentive needed to fix it.

What This Means For You

We are in a confusing market. A strong services-led job market will prop up interest rates, even while the housing sector itself is under serious pressure.

If you are seriously planning to buy in this market, a simple pre-approval isn’t enough. You are navigating conflicting signals, and you need a clear, data-driven mortgage strategy.

If you want to get clarity on your numbers, DM me for a complimentary strategy session.