The ridiculous price spikes now face Bank of Canada’s monster rate hikes, QT, and spiking mortgage rates.
“Housing market is pulling back as anticipated, following unsustainable growth during the pandemic.”
The BoC’s QT started much earlier and is way ahead of the Fed’s QT.
Over 50% of mortgage originations have been variable rate this year. Other mortgages are “fixed rate” typically for 2 to 5 years, after which they adjust.
Blame whatever. Just don’t blame money-printing and interest-rate repression.
“Why the current tightening cycle is unlike anything we’ve observed in the past.”
But wait… Many home buyers had mortgage rates that were guaranteed when rates were much lower.
“The economy can handle higher interest rates, and they are needed.” The BoC is way behind the curve, but way ahead of the Fed.
Mad scramble to lock in rising mortgage rates? A few markets went raging-mania hog-wild. Others not so much. In two, prices dipped again.
Rates “need to rise further.” Balance sheet already shrank by 14%, more shrinkage to come.