Beginning in early 2022, the Bank of Canada began increasing its key rate in an effort to slow inflation after slashing rates during the pandemic to keep the economy steady. Over that period of time they have increased the rate 10 times. Their last decision was to hold the rate at 5% and they have once again made the decision to hold the rate at 5%. This has some experts thinking that they’re done with increases.
“In Canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures. Consumption has been subdued, with softer demand for housing, durable goods and many services." (Evans, 2023)
However Tiff Macklem, the head of the Bank of Canada says not so fast.
“Governing Council is concerned that progress toward price stability is slow and inflationary risks have increased, and is prepared to raise the policy rate further if needed." (Evans, 2023)
So what does this mean for the Windsor real estate market? Well, for current homeowners this will come as relief in the face of rapidly increasing mortgage rates, especially for those on variable mortgages. This will also come as some relief for those preparing to renew their mortgage. For buyers looking for Windsor homes for sale? The rate hold may signal it is time to make your move as some experts believe the bank is done increasing rates.
The Bank of Canada continues to aim for their actions to bring the inflation rate back to 2% by 2025.
Evans, P. (2023, October 25). Bank of Canada holds rate steady but warns more increases are possible - even as markets bet they’re done | CBC News. CBCnews. https://www.cbc.ca/news/business/bank-of-canada-rate-decision-1.7007264
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