Already we had rustling loans in major markets with more solds-over-asking, creeping volumes and scant listings. The biggest single influencer of real estate is the rate of interest. This is a far cry from a few months back when we thought 7% was a possibility. Five-year fixed is 4.6% and insured, high-ratio money a bit less. Meanwhile the smaller guys now offer home loans with that 4-handle. The Big Banks haven’t moved, but they will. We told you Monday this would mean a drop in Canadian mortgage rates. The yield on a GoC 5-year bond just crumbled to 2.8%, which is the lowest in a year, down another 6% on the day, and an incredible 80 beeps below two weeks ago (when it was 3.7% and the Fed was all hawkish). The market also sees increased odds of a recession now (thank you, flaky SVB execs), with lower inflation and a CB pivot coming. So as the price of debt’s pushed higher, yields are slammed lower. The bond market is gorging with funds as investors globally grab the safest assets they can find. We’ll start with rates, moves to houses, then banks and finally with whatever the heck the Fed’s going to do in seven days. Portfolios, houses, rates, yields, the economy – we’re in a maelstrom of mess at the moment, with March delivering more surprises than an Avril Lavigne speech.
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