Francine Tracey

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Good news for the economy
March 6, 2012 @ 12:55 PM by:
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Good news for the economy

It's not all bad news in the world of real estate and home buying. With the Bank of Canada holding its prime rate at an historic 1%, which will likely stay there for most of 2012, coupled with the recent news that the U.S. Fed is leaving their rates unchanged until 2014, it bodes well for new home owners.

The economy is set to grow at a very modest pace of 2%, which will keep inflation low. Consumer confidence has risen, with many believing that the economy will be stronger in the next six months.


Low fixed rates have created an interesting market. Where once variable rates ruled the day, fixed rates are now so attractive, and are trumping variables, that the decision to lock into a mortgage is an easier one. These rates will continue to a fuel the Canadian housing market, with housing prices expected to moderately increase along with an increase in the number of properties sold.

Also, a new online study conducted by TNS Canada on behalf of TMG the Mortgage Group, found that renters are eager to get into their own homes and there is potential for an increase in homeownership demand by 12%. Not only that, they are looking at home ownership with a new attitude and that's good news for financial stability of the country.

Renters are looking at two areas: mortgage rates and mortgage features.  Flexibility in repayment terms is high on the list of what first time home buyers look for. That says a lot - they want to pay off their mortgages quickly. That would potentially free up a lot of capital to be used in other areas such as consumer spending and investing.

Another recent study of a representative sample of Canadians conducted by TNS Canada for TMG The Mortgage Group found that 66% of homeowners currently have a mortgage on their principle residence.  Of those, 22% are planning to renovate in the next 12 months using their home equity and will likely use the services of a mortgage broker.

If you are one of those who plan to renovate, now is a great time to look at your current mortgage and tailor your loan to fit your needs. 

If you are a renter or know of a friend or family member who is currently renting and who may be looking for a home, your referral would be the best compliment I could get.

If you have any questions at all about mortgage in general or the economy, please contact me.

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