{"id":22095,"date":"2023-06-14T10:10:00","date_gmt":"2023-06-14T17:10:00","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=22095"},"modified":"2023-06-07T10:15:02","modified_gmt":"2023-06-07T17:15:02","slug":"bank-of-canada-2nd-rate-hike-of-2023-the-impact-on-spring-summer-housing-market","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2023\/06\/bank-of-canada-2nd-rate-hike-of-2023-the-impact-on-spring-summer-housing-market\/","title":{"rendered":"Bank of Canada 2nd Rate Hike of 2023 &#038; The Impact on Spring\/Summer Housing Market"},"content":{"rendered":"<p style=\"text-align: justify;\">The Bank of Canada announced its second rate hike of the year, increasing the overnight rate by 0.25% to 4.75%. The Bank cited \u201cstubbornly high\u201d inflation as the main factor for today\u2019s rate hike. Variable rate holders and mortgage rate shoppers alike have been waiting for today\u2019s rate announcement and will surely be impacted.<\/p>\n<p style=\"text-align: justify;\"><strong>Fixed Rates Have Already Increased in Advance of the Rate Hike<\/strong><\/p>\n<p style=\"text-align: justify;\">The Bank of Canada previously promised to hold rates as long as inflation is moving in the right direction. However, the past couple of weeks have not unfolded as expected. James Laird, Co-CEO of Ratehub.ca and President of CanWise mortgage lender explains: \u201cSince their last announcement, two things have happened that don\u2019t align with their expectations. April inflation and Q1 economic growth, including consumer spending, came in higher than forecasted.\u201d<\/p>\n<p style=\"text-align: justify;\">Since these key economic indicators are not where they should be, many were prepared for rates to increase. Laird explained that fixed rates already increased ahead of this announcement because many experts were predicting a hike was inevitable.<\/p>\n<p style=\"text-align: justify;\"><strong>Real Estate Competition Has Been Hot but Rising Rates May Have an Impact<\/strong><\/p>\n<p style=\"text-align: justify;\">In a recent survey of 1,200 Zoocasa readers, 76.1% of respondents said owning their own homes is important to them despite affordability and inventory concerns. In the same survey, respondents overwhelmingly said that if the Bank of Canada introduces further increases to the overnight lending rate it would negatively affect their interest in real estate. With 20.4% of respondents interested in a variable-rate mortgage and 19% interested in either a fixed or variable rate, this rate increase may lead to a cooling of the market as those without a mortgage pre-approval may now be able to afford approximately 10% less. However, those with an existing mortgage pre-approval may take advantage of their lower rate and still choose to be active in the market.<\/p>\n<p style=\"text-align: justify;\">So far this spring, prospective buyers that spent previous seasons on the sidelines have come out in full force and inventory has not been able to keep up with demand in many major markets. For example, the Toronto Regional Real Estate Board reported that 15,194 new homes were listed last month, and though this was an increase of 3,830 from April 2023, it wasn\u2019t enough to keep months of supply up. Months of supply for the region now sits at 2.2 months, down from 2.3 months in April and March 2023.<\/p>\n<p style=\"text-align: justify;\">Now that rates have increased it will have a major impact on those with existing variable-rate mortgages. According to Ratehub.ca\u2019s mortgage payment calculator, a homeowner who purchased a home in April 2023 at the national average price of $716,083 with a 10% down payment and a 5-yar variable rate of 5.5% previously had a monthly mortgage payment of $4,075. Now that rates have increased, the variable mortgage rate will increase to 5.80% and they will now pay $4,173 monthly, an additional $98 per month or $1,176 per year.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.zoocasa.com\/blog\/boc-june-2023\/\" target=\"_blank\" rel=\"noopener\">How will The BoC&#8217;s Second Rate Hike of The Year Impact The Spring\/Summer Real Estate Market?<\/a> by Patti Cosgarea | zoocasa<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Bank of Canada announced its second rate hike of the year, increasing the overnight rate by 0.25% to 4.75%. The Bank cited \u201cstubbornly high\u201d inflation as the main factor &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2023\/06\/bank-of-canada-2nd-rate-hike-of-2023-the-impact-on-spring-summer-housing-market\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-22095","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bank of Canada 2nd Rate Hike of 2023 &amp; The Impact on Spring\/Summer Housing Market &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2023\/06\/bank-of-canada-2nd-rate-hike-of-2023-the-impact-on-spring-summer-housing-market\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bank of Canada 2nd Rate Hike of 2023 &amp; The Impact on Spring\/Summer Housing Market &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"The Bank of Canada announced its second rate hike of the year, increasing the overnight rate by 0.25% to 4.75%. 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