• Will Rate Cuts Make House Prices Go Up?

  • Oct 25 2024
  • Length: 46 mins
  • Podcast

Will Rate Cuts Make House Prices Go Up?

  • Summary

  • We analyze the Bank of Canada's recent decision to cut interest rates by 50 basis points, bringing the overnight rate to 3.75%, and its implications for the housing market.

    • The Bank of Canada's significant rate reduction aims to support economic growth and manage inflation, but fixed mortgage holders may not see immediate benefits due to already priced-in rate cuts.
    • Housing demand and prices remain complex, as rate reductions impact supply more than demand, with affordability challenges persisting despite lower borrowing costs.
    • Recent CMHC policy changes allowing higher insured mortgage caps could expand purchasing power and influence market dynamics, particularly for first-time homebuyers in higher-priced segments.

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