Big news today from the United States Federal Reserve! Bernanke announced today that they plan to keep interest rates at record low rates until 2013. This is significant news since Canada generally follows the US quite closely.
What does this mean for real estate? We know that high interest rates slow down home buying and reduce values at the same time. So, we expect continued low interest rates to increase the percentage of home ownership in Canada as homes continue to be very affordable.
It seems that Canadian funders are already reacting to the news. 5 year fixed term mortgages have dropped to as low as 3.49% with variable rates unchanged at 2.2%.
