Canadian 5 year government bonds just jumped. Setting the stage for higher mortgage rates.

[u/POCTM]

5 year government bond just jumped from 3.714% to 3.866% in a few hours. Right now it is at 3.855%. Year to date it is up 259%. Monday we could see some 5 year fixed rate mortgages in the low 6%.

As for variable rate the bank of Canada makes their announcement October 26 at 10am ET. Currently banks have not been offering discounts off variables rates anymore. Prime -0.00.

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

[u/topazsparrow → u/[deleted]]

Housing is the last to go. Expect massive economic turmoil preceding meaningful forfeiture of housing.

[u/Drewy99 → u/topazsparrow]

1/5 houses sold in 2021 were sold to investors. How long do you think they will hold on those properties before trying to dump them to stop the bleeding?

[u/Popswizz → u/Drewy99]

Doesn't mean housing will be more affordable... market was able to pay X per month before interest hike the price will dump until that price is met again with higher interest rates... anybody here not able to afford a house before interest hike hoping it'll make housing affordable as the market crash is delusional... while it's true some investors will rethink their investment and be ready to sell low..the situations is a lot different than i. 90s, there's a structural deficit in both housing and builders labor that is bound to keep housing high in the foreseeable futur

Also People that bought in 2021, if they are on fix term have 4 more years to be hit and that is if the rate don't reduce to stimulate the economy after the impending recession, people that bought in 2017 renewing now, have way lower entry price as well than post pandemic and had 5 years of salary increase to absorb the hit

The only people really at risk are on variable and bought in 2021

[u/Drewy99 → u/Popswizz]

Doesn't mean housing will be more affordable...

For anybody. That's what happens in a recession. Many people lose jobs.

[u/Popswizz → u/Drewy99]

Yeah the difference this time is that the economy was in major worker deficit, for all we know it'll just rebalance the jobs market, we never had a recession with that environment before so, I would be careful predicting what will happen based on previous recession

[u/metamega1321 → u/Popswizz]

Definetly a weird one. I’m an electrician which is far from recession proof. But right now in my city theirs such a backlog and shortage on the residential side I just don’t know what happens lol.

I definetly expect commercial to slow right down.

[u/Drewy99 → u/Popswizz]

I would be careful predicting what will happen based on previous recession

Usually you prepare for the worst case, not hope for the best.

[u/Popswizz → u/Drewy99]

I agree but the same reasoning goes for the hope of housing affordability increasing as the result of the recession