This week delivered a mix of cautious optimism and continued pressure in Canada’s housing and lending landscape. Here’s what you need to know:
Inflation cools, but rate cuts remain uncertain
- April’s headline inflation dropped to 1.7%, the lowest in seven months.
- However, core inflation (CPI-Trim) remains elevated at 3.1%, a key metric for the Bank of Canada.
- Bond yields jumped nearly 10 bps in response — a signal that fixed mortgage rates may rise again soon.
📌 Sources: Statistics Canada, Trading Economics
New home construction hits a 15-year low
- Ontario reported just 12,700 housing starts in Q1 — the slowest pace since 2009.
- That’s a 20% decline from last year, driven by high building costs and slow sales.
- The province’s 1.5M home target by 2031 is now significantly off track.
📌 Source: FAO Economic Monitor, Canadian Press
Household debt climbs, but tax relief may help first-time buyers
- Canadians now owe $1.74 in credit debt for every $1 of disposable income.
- Mortgages account for nearly 75% of the $3.07 trillion in household credit market debt.
- The proposed federal GST rebate could save qualifying first-time buyers up to $27,000 on a new build — potentially lowering monthly payments by $240.
📌 Sources: Statistics Canada, Parliamentary Budget Officer
My Take
Inflation is easing, but not enough to shift interest rate policy just yet. For anyone buying, refinancing, or renewing, it’s a good time to review strategy — especially as incentives shift and rates respond to market pressure.
As always, if there is anything I can assist with please don’t hesitate to ask. Have a great weekend!
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