Quote:
Originally Posted by PeteMoss
I don't think the bank of canada is responsible for worrying about housing prices. They worry about inflation so housing doesn't factor in - but housing prices were going up like mad and they didn't alter interest rates until after overall inflation rose.
And yes - housing prices are going down but they aren't any more affordable for any first time home buyer now.
If you bought a $500,000k house with a 5% down payment when mortgage rates were 1.5% - you were paying about $2000/month.
If the same house went down 20% to $400,000 now and you are making the same $25k down payment - you are now paying $2200/month at 4.59% interest.
And I don't think the lower end homes that first time home buyers typically buy have gone down anywhere near 20% yet.
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Housing and shelter are absolutely factored in to inflation…
Inflation was lower month over month in the US, but higher year over year than expectations through September. This probably locks in a 0.75% increase in the US on November 2, and Canada likely follows suit.