Now that home prices have peaked, reports are coming that the federal government intends to introduce restrictions on its First-Time Homebuyers Incentive (FTHBI) program to cover their exposure.
Category: Mortgage Policy
Thursday’s federal budget outlined measures to address housing affordability, although it’s unlikely to assist first-time homebuyers, especially given the current market conditions.
As of December, The Canadian Real Estate Association’s House Price Index was up 26% year-over-year, setting a new record.
The federal government considers reforms to residential investment or commercial properties to curb house prices.
Home prices in Canada increased past 25% in November compared to November 2020. The record year-over-year high results from low supply and continuing low-interest rates.
Today the Bank of Canada held its last scheduled announcement of the year, suggesting no changes to its forecast that its policy rate will increase in the middle of 2022.
While markets are expecting the first Bank of Canada rate increase in early 2022, some financial experts think the unpredictability of the brand-new Omicron Covid-19 variant might delay early hikes.
Today, the company’s head charged with managing Canada’s federally controlled lending institutions stated that the threat to mortgage credit has increased “just decently.”
Financial markets look at pricing in the first rate increase coming March. However, they may be off on the timing.
Expectations for the first interest rate hike have moved up to as early as April as inflation concerns grow and supply disruptions persist.
Nearly half of C…