Statistics Canada released surprisingly strong labor numbers on Friday, with a jump in employment of 37,000 that more than doubled expectations and prompting some economists who predicted a first Bank of Canada interest rate cut in April to wait until June. “Even though the jump in employment in January suggests a more robust labor market than the headline numbers suggest, the Bank will continue to be concerned about the receding unemployment rate and the resilience of wage growth,” said Olivia Cross, chief economist at Capital Economics. Capital economists and Royce Mendes, chief economist at Desjardins Securities, have shifted their April rate cut forecasts to June from April. “The employment data suggest that June is now a more likely time for a rate cut than April,” Mendes wrote in a note to investors.
Great news for buyers in this market is that most banks and lenders have lowered their interest rates by a full point since the rate increases. This has resulted in an increased affordability of up to $100,000 for many buyers. Not only that, but many economists predict that more rate cuts will be announced in the future. So, what does this mean for you? It means that a shorter mortgage term is recommended. While a 3-year fixed mortgage may have slightly higher rates in the short term, it is still the best option to get into the market while the prices are lower. The key to success is to secure a house now, and take advantage of the lower prices and increased affordability. Don’t wait too long, act now and secure your dream home!