This Week’s Top Stories: Canadians Brace For Higher Mortgage Costs, Business Closures Surge

Time for your cheat sheet on this week’s top stories. 

Canadian Real Estate

Canadian Mortgage Rates To Go Higher For Longer As Banks See Smaller Cuts

Canadian mortgage borrowers may want to brace themselves for even higher interest costs. The Government of Canada (GoC) 5-year bond yield continues to climb rapidly, with this month representing nearly half the increase seen over the last year. They aren’t alone—other yields are climbing too, which will translate into rising mortgage costs across the board. The increase is part of a larger global trend of rising yields, which are going “higher for longer” across the world. 

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Class Action Against Toronto Real Estate Industry Price Fixing Gets Approved

A class action suit against Greater Toronto’s real estate industry just cleared another roadblock. The suit alleges the industry is price-fixing Realtor commissions. The defendants attempted to have the case dismissed on the basis the allegations aren’t grounded in reality, but that was shot down this week. The case is now clear to proceed, and regardless of whether these allegations are proven, can lead to a big change in commission structures across the country. 

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Half of Canada’s Young Adults Gave Up On Homeownership: Mortgage Pros

Canada’s potential first-time homebuyers are increasingly giving up on homeownership, according to a semi-annual survey conducted by Mortgage Pros Canada. The industry group representing the country’s mortgage industry found that nearly half of respondents that didn’t own a home, don’t see ownership in the future as a reality. Rising shelter costs have climbed so sharply that 2 in 5 people are now considering leaving their province to find a more affordable region. 

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Canadian Business Closures Surge, Fewest Business Openings Since Lockdowns

Canada’s business environment is looking a little more grim. Statistics Canada data reveals the number of active businesses made a sharp drop in June, resulting from more closures and fewer openings. Higher costs, and debt focused households have had a negative impact on business prospects, and that’s going to amplify any downturn. 

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US Real Estate

US New Home Sales Pull Back As Price Correction Continues

US new home sales fell 8.7% in August, as prices continue to correct with the data weaker than expected. Median sale prices dropped 1.4% to $430,300, 13.7% below the all-time high in October. New home supply is on the rise, and experts expect weak sales to continue in the near-term due to rising interest rates.

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  • Duddly-Do-Right 4 months ago

    But RE prices in Ontario keep bucking the trend and going up? What sort of a recession is this then???

    • Jay 4 months ago

      #Snowashcession #LaunderingSession
      Meme away 😉

      Until the practice of opaque RE and # corporations owning residential assets as safely deposit boxes is looked into/regulated/prohibited. Things will chug along. All levels of government are addicted to land transfer taxes – nothing will change until people protest by striking at work, rent payments, or simply move to another local.

      We’re a somewhat corrupt nation full of money laundering for the entire world. CREA projects 493k RE units changed hands (10% less than 2022).

      Interest Rates are having some effects on investors/end users. Doesn’t mean jack poooo to all cash buys layered under a bunch of numbered companies.

      IIWII

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