Canadian homeowners may benefit from further rate cuts as bond yields fall to 2-year lows. Economic instability has prompted investors to seek the safety of bonds, leading to concerns about the economic outlook and potential rate cuts. The Government of Canada bond yield fell more than 10 basis points on Friday alone, which is expected to result in rate reductions on Canadian mortgages. Ron Butler of Butler Mortgages predicts that fixed mortgage rates will decrease even further next week [efd860a3].
In other news, the federal government's new rules allowing certain first-time homebuyers to take out 30-year amortizations came into effect on August 1. However, critics argue that the extended amortizations are limited to newly built homes and insured mortgages under $1 million. Falling posted mortgage rates can lead to higher prepayment penalties for borrowers looking to break their mortgage early.
St. John's, Newfoundland was named the best city for renters in Canada. The Ontario government announced measures to address the housing supply crisis, including the construction of 1,000 new dedicated student housing spaces in London, ON, and an Advanced Wood Construction Action Plan. The Consumer Confidence Index in Canada rose moderately, driven by positive sentiments about job security and real estate. Several mortgage lenders and insurers in Canada were recognized as Great Places to Work. Canada ranks fourth globally for the size of its homes.
Key economic releases for the week include the ISM Services PMI in the US, Merchandise Trade Balance in Canada, Bank of Canada summary of deliberations, Consumer credit in the US, Wholesale trade in the US, and the Employment report in Canada [efd860a3].
