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I received an email from one of our Mortgage Specialists today:

 

Good Morning,

 

Rates are on the rise again suddenly.  Over the next few days they will trickle up to around 3.94% for the 5yr fixed.  I still have as low as 3.45% available so any pre-approvals should happen quickly if you know of any clients sitting on the fence.

Have a great day and don’t hesitate to contact me with any questions.  As well, the latest TD Economics report is below.

 

 

TD Economics

 

Release: November extends the climb in home sales to four months

· Existing home sales increased for a fourth consecutive month in November, climbing by 4.8% M/M to nearly 38,000 units (seasonally-adjusted).  As of these November figures, sales were roughly halfway between their peak of December 2009 and their trough of July 2010.

· Sales activity increased in two-thirds of local markets.  Within large core urban markets, the uptick in sales was led by Vancouver (+11%), Montréal (+8%), and Edmonton (+7%).

· Stepping back to the national trough in sales of July, the 20% increase in sales since then has been led by British Columbia (+29%), Ontario (+24%), and Saskatchewan (+20%). Other regions/provinces have also seen an uptick in activity, but it has been more subdued in Alberta (+15%), Québec (+11%), and the Atlantic (+9%).

· On the supply side of the national market, new listings were down 0.7% M/M.  Combined with the sales figure, this resulted in a firmer market balance than in October.  The sales-to new listings ratio rose to 0.55 (from 0.52 in October), while the months of inventory measure declined to 5.8 months (from 6.1 months in October).

· The seasonally-adjusted average price rose by 1.8% M/M in November, while the actual (unadjusted) price gained 2.0% Y/Y.  Monthly (seasonally-adjusted) average home values have been accelerating over past four months, reflecting the firmer market balance.  Meanwhile, year-over-year changes, while still modest, have also been picking up over the last two months after near flat readings in August and September.

Key Implications

· With the November figures in and assuming steady sales in December, Q4 would mark a 14% increase in sales.  As such, and not coincidentally, it appears that Q3 was not only the low-water mark in economic growth, but also in resale housing activity.

· We expect home sales to remain well supported over the next couple of quarters before increases in borrowing rates eventually begin to ease the pace of sales.  Reading through the quarterly volatility, we expect the market to move mostly sideways over the next couple of years.  The bottom line is that before long, eroding affordability and resale housing sector sluggishness will slightly dampen economic growth.  Further analysis and forecasts are provided in “Canadian Housing Landing Safely” (Dec. 9) and the latest edition of our Canadian Quarterly Economic Forecast, to be released today.   

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