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Mortgage News Summary: Declining Unemployment Prompts Bank of Canada to Reconsider Rate Cuts

Canada’s Labour Market Sees Job Gains

January brought an upturn to Canada's economic landscape, with the addition of 37,000 jobs, signalling a shift in employment patterns. The decline in the unemployment rate from 5.8% in December 2023 to 5.7% in January 2024 marks the first decrease since December 2022. However, with these improving unemployment metrics, the Bank of Canada (BoC) faces a fresh set of complex decisions regarding interest rates. According to the Financial Post, "That prompted some economists who predicted the first Bank of Canada cut in April to push back their forecasts until June," reflecting the ongoing economic changes.

Housing - Who is Right?

As per our previous post, we mentioned that Tiff Macklem believes the housing crisis may lie in a supply shortage, emphasizing that it cannot be resolved solely through interest rate adjustments. However, Sean Fraser, Canadian Housing Minister, believes that interest rate cuts could potentially stimulate the housing supply. According to Global News, Fraser said, "My expectation is if we see a dip in interest rates over the course of this year, a lot of the developers that I’ve spoken to will start those projects that are marginal today, but will actually pencil out six months from now if interest rates were to take a dip."

IK Financial Mortgage Team operates on behalf of Mortgage Edge. Lic#10680

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