The Bank of Canada held its overnight lending rate at 0.25% on July 21/09. The Bank rate which is set .25% above the overnight lending rate stays the same at .5%.
The Bank states that it expencts Canada's economy will contract 2.3% this year which is better than the April forecast which predicted a 3% decline. It cited the recent strength in domestic demand as the main reason for the rosier projection.
'The Bank has acknowledged that pent-up demand from late last year and earlier this year, combined with low mortgage rates, has resulted in a stronger than expected recovery in the housing market,' says Canadian Real Estate Assn. Chief Economist Gregory Klump. 'The strength in the housing sector was cited as the reason for the upward revision to the economic forecast, outweighing the moderating effect of a high Canadian dollar.'
We are certainly seeing this in our Saskaton market. July 2008 sales were up 28% from July 2007 sales. Inventory is down from it's height of 1748 homes for sale in Sept. 2008 to 1291 homes being available for purchase. Inventories pre-boom in the years 2004-06 were typically at 700-800 homes.
We are experiencing a mini-boom from the pent up demand. With inventory levels still higher than normal and interest rates staying steady and low, now is a great time to consider purchasing a new home.