Spring is a season that normally brings with it snow melting sun, sprouting tulips and a tide of home shoppers. But with as few Canadians looking for mortgages as there are looking at green grass, we can’t help but ask where is the usual evidence of this?
Economists are not suggesting that the low forecast for online spring mortgage inquiries are to be weather related, but they are saying that the trend could have something to do with the decline in housing and commercial starts seen this year in Canada compared with past years.
Richard Cho, speaking for the CMHC, told the Calgary Herald that housing starts are down 25% from last year. The CBC reports that starts in the non-residential sector have slid more than 13% over the last several months.
Google Insights for Search shows that online queries for “mortgage rates” and “mortgage brokers” will take a dip by as much as 60-70% from search rates seen in the spring months of 2009.
Though optimism is high among economists for a pickup that gains momentum throughout the year, we just aren’t seeing it yet.
Ebb and flow is common in the mortgage industry, especially when rates take such a dramatic drop as they did last year, achieving history-breaking lows. We can see this clearly exemplified in a timeline representation of mortgage statistics in Canada.
Following a high period for housing sales, wherein many Canadians take advantage of the record low mortgage rates at their disposal, housing prices tend to ascend and buyers tend to back off from the market for awhile. Usually during this time, rates will start to rise and housing prices will start to drop.
In 2011, we see fixed rates creeping marginally higher, though the prime rate holds at 3%. We see housing prices sustain themselves, or reduce by mere hundredths of a percent. With a market keeping steadier than expected, it can only be a matter of time before an increase in activity presents. And with it, we hope, some sun and warm temperatures.
This article was provided by CanEquity Mortgage Canada. For more information, please visit canequity.com.