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Residential Market

 

September-2013 - Good Morning Maple Ridge Realtors and Real Estate buyers and seller. The policy announcement by the Bank of Canada makes it pretty clear its benchmark interest rate is not going anywhere anytime soon. The Bank continues to signal that the next move will be up; it is when that remains the big guessing game.

Rate watchers vary in their timelines but most believe there will not be a move until this time next year. Some believe the Bank may have to wait another year after that, well into 2015. So, variable rate or short-term fixed rate mortgages may be the way to go, especially for robust borrowers.

Longer term fixed rates have already been pushed up by rising bond yields. That's likely to continue as long as the economic outlook remains positive.

Of course the underwriting restrictions put in place by CMHC will increase costs for lenders which will, in turn, be passed along to borrowers in the form of higher rates.

 

Market Commentary

U.S. reports dominate today.

 

Friday the 13th turns out to be bad luck for U.S. retail sales.  The August figures came in under expectations with a modest 0.2% increase.  Forecasts called for a 0.4% increase.  Core spending -- without cars, fuel and building materials -- also posted a 0.2% rise.

 

The latest read on consumer sentiment in the U.S. is also down.  The September figure from the University of Michigan dropped to a five month low hitting 76.8, down more than five points from July.  The gauge of future expectations tumbled as well.

 

The American PPI beat expectations with a, seasonally adjusted, 0.3% increase.

 

 

Commercial Bond Yields

Canada Mortgage Bond

Canada Housing 12/15/18: 2.51%

Canada Housing 09/15/23: 3.28%


 

Select Government of Canada Bonds

CAN 4.25 06/01/18: 2.07%

CAN 1.50 06/01/23: 2.78%

GOC Bonds are for reference purposes only

 

Floating Insured Cost of Funds

1.19%

 

Bank Prime Rate

3.00%

 

Posted Rate

1 Year: 3.09%
2 Year: 3.14%
3 Year: 3.65%
4 Year: 4.54%
5 Year: 5.14%

North American markets started the day higher, reversing yesterday's declines.

 

Bond yields are up 1 bps.

 

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