HomeMortgage2 of the Key Aspects of Housing Affordability - Mortgage Rates &...

2 of the Key Aspects of Housing Affordability – Mortgage Rates & Price

You’ll often hear that the residential real estate market will be the first among all players in the economy to signal a cyclical change (e.g., from recession to recovery or vice versa) brought on by central bank interest rate action.

This is an important topic in the context of current worries about recession due to the Federal Reserve lifting its federal funds rate from essentially zero to a range between 1.50% and 1.75% and the Bank of Canada hiking its overnight rate from 0.25% to 2.50% in four steps since early March.

By the way, it’s not always true that new and resale home markets are ultra-responsive to interest rate moves. When the federal funds rate was lowered after the financial crisis of 2008-2009, it still took years for U.S. housing starts to regain anything like their former vigor.

The key determinants of housing demand are probably captured in the word…

Read more at canada.constructconnect.com

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