Last year when we took our annual look back on the mortgage market, there was a lot to report. New mortgage rules had been implemented by both the federal government and the Office of the Superintendent of Financial Institutions. Mortgage rates had largely stayed the same, but those new rules definitely put a pinch in our last quarter of 2012, as we saw homeowners and home buyers struggle to work within those guidelines. But what did the mortgage market hold for 2013? Just what exactly happened, and what can we expect for 2014?
Well it’s true that there were no new mortgage rules imposed upon us this year, but it was the first full year we had to adjust to those that were put in back in 2012. There were many experts and analysts who said we wouldn’t be able to, and that those rules of last year would cause our housing market to come to a halting stop. In the fall of last year, that halt came – but it was just temporary. 2013’s market was not only strong, it was incredibly healthy during the first quarter, with some even saying our spring market came at the end of winter. Now, after a full year of working within those rules, our market is back on track and clicking along tickety-boo.
The Bank of Canada wasn’t expected to increase the overnight lending rate this year, and they didn’t. No surprise there, but you might want to brace yourself for a rate increase in late 2014. While no one thinks a move will be made before next fall, rates will rise eventually, and it’s very possible that that could occur this coming new year.
As for the rate you’ll find at banks, they did have some activity this year. The big institutions started to raise their rates in August of this year, followed by them cutting them back again a couple of weeks later, and then raising them a couple of weeks after that. These rates are closely tied to the bond market, so it’s difficult to predict what they’ll do in the New Year, but more movement than we’ve seen in the past few years is to be expected.
Sadly, while we might be used to the mortgage rules, and the mortgage rates haven’t moved too far away from the lows we’ve seen, we’re still piling on more debt than we can handle. Consumer debt reached another historical high when it hit 163.7 per cent this past quarter, and with the holidays still under way, there’s a very good chance that we’re only adding to that number. This is something that consumers will have to get under control if they want to end 2014 in as fine fashion as they did 2013.