This Week’s Top Stories: Canadian Home Prices Near Highs, and BoC Warns Rate Cuts Reduce Affordability

Time for your cheat sheet on this week’s top stories. Canadian Real Estate Bank of Canada Research Warns Rate Cuts Can Worsen Housing Affordability Bank of Canada (BoC) researchers studied the impact of rate cuts on housing. They found that rate cuts boost buying immediately, with demand rising for up to 24 months. New supply follows nearly two years later, responding to the increase in demand. That’s how rate cuts are supposed to work, creating excess demand to boost prices and thus inflation. The researchers conclude that lower rates don’t improve affordability, but do the opposite. Continue Reading… Canada’s “Record” Housing Correction? Prices Near Highs In Most Provinces The Great Canadian housing crash has produced the largest correction in history. Despite the industry’s headline data, most of the country is seeing the exact opposite. The national index shows that home prices are down 21.3% (-$179.3k) from the peak, but that’s almost entirely due to B.C. and Ontario. Those are the only provinces to show major drops, but most provinces are within 3 points of record highs. Market stimulus isn’t restoring activity; it’s boosting prices to new highs in most provinces. Continue Re...