“That can have an impact. People want to move into new rental (units), from old rental. It does have an impact on the market. Last year was a strong year,” Frketich said. CMHC has adjusted its 2013 housing forecast to account for the decline. “The forecast now is 520 starts, which is a 21 source per cent decline from last year and it is mainly down on the multi side,” Frketich said.
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When Will Rising Mortgage Rates Hurt The Housing Market?
Longer term, the impact of rising rates is typically offset by stronger economic growth. Ever since mortgage rates started their steep climb in early May, weve all been on high alert, watching how higher rates will affect the housing market. For a would-be buyer calculating the mortgage payment on their dream home, the effects are obvious: the increase in the 30-year fixed rate from 3.59% in early May to 4.73% at the end of August (according to the Mortgage Bankers Association, or MBA) means a 15% increase in the monthly payment on a $200,000 mortgage. That should deter homebuyers and reduce mortgage applications, sales, and prices, right? In theory, yes, but of course the real world is much more complicated.
For the original version including any supplementary images or video, visit http://www.forbes.com/sites/trulia/2013/09/11/how-long-before-mortgage-rates-hurt-housing/