Alta West Mortgage Update

Bank of Canada likely to keep rates on hold
After raising interest rates twice this summer from record-low levels, CIBC's chief economist says weakness in the U.S. economy may force the Bank of Canada to put future hikes on hold after September. "North America's story is again darkening," says Avery Shenfeld in CIBC's Global Positioning Strategy report released Wednesday. "We were looking for a material second-half slowdown for the U.S. but as it turns out, it's already happened."

Canada's housing market can't stay hot forever

Canada's housing boom is beginning to crack. The number of homes sold dropped considerably this summer in two of the nation's largest cities, Vancouver and Toronto. Condo sales in the latter shrank during this year's second quarter, the first time that's happened in 16 years. Resale prices are falling. Yet all this fits neatly with a prevailing opinion among realtors, economists and federal officials: that a combination of new harmonized sales taxes in Ontario and B.C., stricter lending standards and looming interest rate increases "front-loaded" sales into the first half of this year. Activity and resale prices will drift gently downward for the remainder of this year and the next, but Canadians will be too busy enjoying their sound banking system to notice. 

Major banks announce cuts to mortgage rates

One day after a report showed Canadian housing sales were down 30 per cent, most major banks announced they were cutting mortgage rates. Most banks trimmed mortgage rated by one tenth of a percentage point, effective Tuesday morning. The move brings the five-year closed rate down to 5.49 per cent. 

U.S. needs to reset mortgage mess

Washington faces a mortgage market conundrum. A conference today hosted by the U.S. Treasury is supposed, finally, to start addressing what to do with Fannie Mae and Freddie Mac. But the bunch of fixes proposed by regulators and lawmakers in attempts to make private home loans safer is causing other problems.