The Bank of Canada came out with the 2
reports this week. The first as I am sure you have heard is holding
interest rates firm so there will be no impact on any variable rate
loans people might have. All good news for those trying to lower their
debt load. The news that came out with the report though, while as
careful as ever, does indicate that Canada is doing fairly but global
conditions are not looking to help raise the boat any time soon.
In
summary, the US is not doing too badly with some forward momentum,
Europe is still on the down slope and China and other emerging economies
have slowed "somewhat" more than expected. They also indicate that the
rates of growth might be stabilizing, but the "somewhat" makes me think
they may be being optimistic. It is good news that our commodities are
holding us up as prices have increased.
I did like the call
for our economy to be at full capacity by the end of 2013. I also like
the dichotomy of talking about our growth is related to consumption and
the concern over household debt burden. I heard a comment on CBC that
summed this up well. They want the people that can afford to build debt
to spend and keep the economy going, sort of like the encouragement the
US gave people before the collapse, but they also want those who cannot
afford the debt to pay it down so we do not collapse. Somewhere in
there I guess there is a happy middle ground of debt where people keep
the economy going but do not collapse the system. This also assumes
people are good judges of where that is. All I can say is that I hope
people are getting the advice they need to make good decisions.
The
sad news is for our industry is that they expect housing activity to
decline from historically high levels and a high dollar to continue.
They also expect inflation to get back to the 2% target range by the end
of 2013. The rest of the piece says essentially that they would like
to raise rates, but can't.
So, assuming these very smart people
have a handle on things we are not looking at any major mortgage rate
changes for the next year or so. There will be the small ups and downs
we have come to see, but we will probably remain in historically low
territory for the foreseeable future. Great news for home buyers and
people renegotiating their deals.
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