Written by Piper Birks on January 14, 2012.
The Bank of Canada announced this morning that interest rates will remain unchanged for the 11th consecutive time over the past 15 months. The last time the BOC made a change to the overnight lending rate was in September 2010 with a moderate increase of 0.25 per cent.
The overnight rate currently sits at 1 per cent. The Bank Rate is 1.25 per cent and the deposit rate is 0.75 per cent.
The news is really no news at all, given that nearly all industry professionals and top economists were anticipating no change. But what should be of interest to consumers is the justification behind the decision. Heres why the Bank of Canada is keeping interest rates where they are.
- The outlook for the global economy is getting worse.
- The recession in Europe is expected to be deeper and last longer than originally anticipated.
- The BOC was coy in suggesting they had faith Europe could get a handle on the situation: although this assumption is clearly subject to downside risks.
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Written by David Batchelor on September 27, 2011.
With all the talk of getting a new mortgage theres one question which no one seems ready to touch: Why doesnt the government ought to set mortgage rates?
At first this may seem like an audacious idea, a violation somehow of the free market absolutism preferred by so many businesses and industries at least until they need a special rule, tax break or handout from Uncle Sam.
In fact, it was not too long ago that Uncle Sam actually set mortgage rates for government-insured loans. For instance:
- Until November 30, 1983 HUD set interest rates for FHA mortgages. The practice ended with passage of the Housing and Rural Recovery Act of 1983.
- Under the Veterans Home Loan Program Amendments of 1992, the VA is allowed to set the maximum interest rate that can be charged for a VA loan as well as the maximum number of points.
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Written by Piper Birks on August 27, 2011.
After setting new lows last Thursday, mortgage rates drifted higher this week…that is until today when consumer borrowing costs improved sharply. This can be seen in the chart below….
If the note rate line is moving up, the closing costs associated with it are on the rise. If the note rate line is moving down, the closing costs associated with it are falling. The lowest home loan borrowing costs of our lifetime were available last Thursday. They didn’t stick around long though, mortgage rates went on a four day losing streak after that which pushed BestExecution quotes up by 0.125 to 0.25%. Fortunately, anyone who didn’t lock their loan already was given a reprieve today when the market improved. Mortgage rates aren’t quite as low as they were last Thursday, but they’re still super aggressive.
The chart above compares the average origination costs (as a percentage of loan amount) for several available mortgage note rates as quoted by the five major lenders. Ea
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Written by Lilian Rydge on April 25, 2011.
Boulder Group found that for the first time in a long time, single tenant net lease cap rates, across the retail, office and industrial sectors, compressed in the first quarter of 2011. Of course, this is great news for the commercial real estate industry as a whole. Per this GlobeSt.com article:
Randy Blankstein with the company tells GlobeSt.com that cap rates had been climbing in all asset types for the past year, but now the trend looks more like a plateau. He says interest rates will likely rise, and sellers and developers will put more product on the market, keeping the cap rates at about even the rest of the year.
He says net lease demand has come from investors who are in pursuit of a focused investment strategy heavily concentrated in the bank and drugstore sectors, and ground leases. “Geographically, the top 25 ‘NFL’ metropolitan areas are a huge share of activity, where there’s overwhelming demand for core offerings, and only a little investment going after second- and third-tier markets. The spre
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