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It seems the consensus is leaning towards a downward trend in interest rates for 2024, and that’s a positive development. Predictions vary regarding when the Bank of Canada might initiate a reduction in the bank rate; some anticipate it happening as soon as April 2024, while others speculate it won’t occur until the latter part of the second quarter. Nonetheless, any decrease will likely be gradual, and it’s unlikely we’ll see a return to the era of 2% mortgage rates. A more rapid decline in rates would signal a bleaker-than-anticipated economic downturn, which is certainly cause for concern. Already, long-term mortgage rates have begun to decline, largely influenced by movements in the bond market rather than direct adjustments to the Bank of Canada rate, primarily impacting short-term and variable-rate mortgages. Consequently, it’s plausible to expect long-term rates to hover below 5% shortly.
Your local real estate expert. Paul Van Grootheest
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