The Week in Economic and Real Estate News
CMHC made the biggest industry news last week by announcing increases to default insurance premiums, effective May 1st. Premiums will increase by about 15% for borrowers with 5% down which, for the average Canadian homeowner with a five year mortgage, will increase carrying costs by about $60 annually.
RBC's latest Housing Trends and Affordability report was published last week. Rising incomes in the fourth quarter of 2013 improved affordability after it had declined in the two previous quarters. The potential for rising mortgage rates this year could erode affordability again.
The Canadian economy ended 2013 with a strong performance in the last quarter of 2013, as reported last week by Statistics Canada. After upward adjustment of two previous quarters, for 2013, the economy grew at a rate of 2%. In the US, growth for the year ended up at a somewhat disappointing 1.9%.
The benchmark government of Canada five year bond yield closed last week at 1.63%, down from 1.69% the week before.