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While Canadian Prime Rate is expected to be reduced this coming April 22, 2008 interest rate-setting meeting by Bank of Canada, RBC’s recent forecast on 5-year bond rates is projected to move up the next few quarters.
Canadian home buyers will likely have another year of low interest before rates are expected to move up. The US housing market and subprime woes will take a while to stabilized. A projected slow down in the US economy or a recession will have an impact on the Canadian economy.
More Balanced Market for 2008
So far, the housing markets in Calgary, Edmonton and the Fraser Valley area of British Columbia have excessive housing inventories. A slower market in these areas may be sign that the housing market in Canada is loosing its momentum.
In view of the relatively strong economy, low interest rates and healthy demand for housing, housing experts are positive that price gain will continue. Price gain will be at a slower pace and the market will be more balanced for 2008. For home owners who are planning to get a variable mortgage, look for a bank that can assure you the "best fixed rate when you convert" from variable to fixed term.
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