CMHC Announces Restrictions to Guarantees in an Effort to Cool a Booming Housing Market
As Canada’s housing market continues to thrive, it appears that CMHC has taken yet another step to cool things down. This week, the Financial Post reported on the changes that CMHC announced which will restrict the amount of new guarantees it offers to banks and other lenders on mortgage backed securities.
CMHC advised the financial community of the restrictions this month. In the Financial Post article, Doug Porter, chief economist with the Bank of Montreal, surmised that perhaps the sales prices in the past month led CMHC to take an additional step to further cool the housing market.
According to National Bank financial analyst Peter Routledge, this change may lead to mortgage rates charged by the major banks increasing from between .15% to .45%.
Our question to you is: if the major banks raise their rates, what impact do you think this will have on the real estate market in Canada?
You can read the full article here at http://business.financialpost.com/2013/08/06/cmhc-restricts-levels-of-new-guarantees-for-banks-and-mortgage-lenders/.
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