June 23, 2024

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Will the Bank of Canada’s interest rate cut spur the housing market?

2 min read

Pent-up demand is expected to drive both sales and prices higher

Article content

When the Bank of Canada cut its overnight lending rate by 25 basis points last week, the response from housing experts largely fell into two camps: those who believe that relaxing interest rates will buttress the struggling real estate markets, and those who believe the cut is not large enough to influence market outcomes this summer.

Housing markets are extremely sensitive to movements in interest rates, which subsequently affect mortgage rates and monthly mortgage payments. In the past, housing sales have reacted strongly to changes in rate regimes. Therefore, estimating the likely impact of declining rates is paramount for lenders and mortgage-seekers.

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Kelly Pullen

2024-06-09 09:00:03

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