CMHC (Canada Mortgage Housing Corporation) provides mid-term housing and mortgage market predictions but will they come true? One of the things they forecast in the mortgage market is for rates to rise moderately mid next year (2017). Pretty much every year since the financial crisis and meltdown in 2008 economists have been forecasting a rise in interest rates. The fact is they are lower today than they were 8 years ago when the biggest financial crisis since the 30's hit the globe.
“The record-low interest rate environment, which has almost seemed, at points, permanent will soon come to an end, according to the Canada Mortgage and Housing Corporation.
However, rates will remain attractive.
Mortgage rates are expected to rise moderately from current levels in the first half of 2017. We forecast the five-year posted rate to lie within the 4.4% to 5.0% range in 2016 and within the 4.7% to 5.3% range in 2017, CMHC said in its quarterly report, released Monday. Low mortgage rates will continue to support housing demand; however, the uncertainty surrounding lower oil prices remains the most significant risk to the outlook for the Canadian housing sector.
Housing stock may be slightly constricted in the coming years, with starts expected to slow, according to the Crown Corporation.
We expect the growth of housing starts to slow in 2016 and 2017. On an annual basis, housing starts are expected to range from 181,300 to 192,300 units in 2016 and from 172,600 to 183,000 units in 2017, a slowdown compared to 195,535 units in 2015, CMHC said. MLS sales are expected to range from 501,700 to 525,400 units in 2016.
Sales are expected to slow as well.
In 2017, MLS sales are expected to be in a lower range of 485,500 to 508,400 units as demand for existing units is expected to moderate relative to 2015 and 2016 reflecting the fact that the current (i.e. as at 29 April 2016) ratio of existing home sales to the number of households is historically high,” CMHC said.
“CMHC’s 2016 second quarter Housing Market Outlook forecasts the average MLS price to be between $474,200 and $495,800 in 2016 and between $479,300 and $501,100 in 2017, CMHC said."
SOURCE < MortgageBrokerNews