Benjamin Reitzes (pictured top), managing director, Canadian rates and macro strategist at Bank of Montreal (BMO), told Canadian Mortgage Professional the central bank’s 25-basis-point increase on October 28 may have a slight negative impact on the market, but that there wasn’t much momentum to stall in the first place.
“What’s notable is that you already had mortgage rates notably higher right across the curve. So the only point where they were contained was on the variable side,” he said. “At least half the activity was coming in variable, according to the data.
“So [the hike] will provide a bit more of a dampener, I think, on the margin. Of course it makes a difference – but it’s not as if housing was booming. And so there probably is a limit to how much weaker it gets.”
Why the housing market is still slow
The main culprits for the still-sluggish housing market are well known at this stage: economic uncertainty triggered by the US-Canada trade war, and inflation concerns as a result of surging fuel costs.