Weekly Digest

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February 9th, 2024

How a Strong US Economy Influences the B.O.C 

The U.S. economy is clearly in a better place than Canada’s. The U.S. GDP for Q4 is clocking in at 3.30% while we lagged at an estimated 1.20%. 

A sturdy US economy may have pulled Canada from a harsh recession edge, however; it does not help with the overall inflation numbers.

As the USA economy remains strong 

• They purchase more Canadian product 

• There is increased consumer spending 

• This leads to increased or sticky inflation  

In the BoC’s January 24 rate meeting notes, it expressed concern, noting, “members agreed there was a risk that U.S. consumer spending could continue to be stronger than expected.” 

Rates Won’t Fix Affordability

B.O.C Governor Tiff Macklem spoke during a speech at the Montreal Council of Foreign Relations on Tuesday. “The housing problem won’t fix overnight”… with lower interest rates, he explained. Monetary policy cannot fix lack of supply, zoning restrictions, delays, and increasing immigration targets.

Keep in mind, by the end of 2024, 65% of all mortgage holders will have felt the shock of higher interest rates.

Market Activity

TRREB is forecasting a 17% rebound for the 2024 housing market, with 77,000 units sold (up from 66,000 in 2023).

Here is the recent surge in activity for January of 2024.

Stock Market

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 5.09%

• 3 year fixed, 30 yr amortization – 5.29%

• 2 year fixed, 30 yr amortization – 6.00%

• 5 year variable, 30 yr amortization – Prime – 0.60% = 6.60%

• 5 year fixed, 25 yr amortization – 4.99%

• 3 year fixed, 25 yr amortization – 5.19%

• 2 year fixed, 25 yr amortization – 5.90%

• 5 year variable, 25 yr amortization – Prime – 0.70% = 6.50%

INSURED

• 5 year fixed, 25 yr amortization – 4.89%

• 4 year fixed, 25 yr amortization – 4.89%

• 3 year fixed, 25 yr amortization – 4.99%

• 5 year variable, 25 yr amortization – Prime – .90% = 6.30%

Fast Facts

• 450,000 – The number of visitors expected to flock to Las Vegas for the Superbowl between the San Francisco 49ers and the Kansas City Chiefs.

• 10,752 – The number of hockey cards found in a Regina basement potentially worth millions. The 16 sealed boxes of 1979-80 cards likely have copies of WayneGretzky’s rookie cards.