If you've been listening to the news then you know that posted mortgage rates at some of Canada's biggest banks have edged up .35 %, you can read about it HERE AT CTV. To put it in more tangible terms that equates to about a 7% increase in carrying costs as compared to current rates.
Our fragile economic recovery hinges on the ability of consumers to take on debt, and with rates climbing that means more money going to interest payments and less circulating in the general economy. In layman's terms....this ain't good.
Where do you think housing prices will be next summer in a climate of increased taxation (hello HST) and higher mortgage payments? The U.S. economy started its slide as many American homeowners woke up to find themselves owing more on their homes than they were worth. The technical term is negative equity...more common language used by underwater property owners is "holy sheet, we're screwed".
Canada's real estate markets are just coming off a steriod induced buying frenzy the past 6 months or so, with bidding wars taking place among frantic buyers worried that they would be missing out on the buying oppourtunity of a lifetime. Not much different from people who invested in oil last year at over $100 a barrel or the tech stock geniuses of the late nineties.
Interest rates don't have to climb into double digits for our housing market to take a nose dive, even a modest climb to just 6% will have 'For Sale' signs popping up like dandelions. A mere 10% drop in equity will have a significant number of home owners owing more on their homes than the property is worth.
Higher taxes, higher debt payments, higher unemployment...it might just be time to legalize marajuana, at least that's a high that can be enjoyed.
Canadian Soapbox is now listed in the Top 3 at Canadian Blogosphere. To help this blog climb even higher click on their icon, then hit the green button to vote - 1 vote per day per IP - Thanks eh.
Our fragile economic recovery hinges on the ability of consumers to take on debt, and with rates climbing that means more money going to interest payments and less circulating in the general economy. In layman's terms....this ain't good.
Where do you think housing prices will be next summer in a climate of increased taxation (hello HST) and higher mortgage payments? The U.S. economy started its slide as many American homeowners woke up to find themselves owing more on their homes than they were worth. The technical term is negative equity...more common language used by underwater property owners is "holy sheet, we're screwed".
Canada's real estate markets are just coming off a steriod induced buying frenzy the past 6 months or so, with bidding wars taking place among frantic buyers worried that they would be missing out on the buying oppourtunity of a lifetime. Not much different from people who invested in oil last year at over $100 a barrel or the tech stock geniuses of the late nineties.
Interest rates don't have to climb into double digits for our housing market to take a nose dive, even a modest climb to just 6% will have 'For Sale' signs popping up like dandelions. A mere 10% drop in equity will have a significant number of home owners owing more on their homes than the property is worth.
Higher taxes, higher debt payments, higher unemployment...it might just be time to legalize marajuana, at least that's a high that can be enjoyed.
Canadian Soapbox is now listed in the Top 3 at Canadian Blogosphere. To help this blog climb even higher click on their icon, then hit the green button to vote - 1 vote per day per IP - Thanks eh.
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