House Price Growth to Cool by End of Year: TD
TD Bank is forecasting that home prices have further to rise yet before finally starting to lose steam by the end of the year.
“…with markets remaining historically tight, more near-term gains are in the cards,” wrote TD economist Rishi Sondhi in a recent report.
But, with home prices already up 31.6% in March on an annual basis, and with sales up 76.2%, Sondhi added that such growth is “unsustainable.”
“Accordingly, we anticipate some cooling in sales starting in the second half of the year, as rising interest rates begin to bite,” he wrote. “This should also sap some steam from price growth.”
In the near-term, watch for some potential “pull forward” of sales as buyers try to get in before a stricter stress test takes effect June 1 for uninsured mortgages (those with a down payment of 20% or more). On the other hand, Rishi notes that the third wave of the pandemic could also weigh on activity.
Source: Canadian Mortgage Trends
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