The British Columbia Real Estate Association (BCREA) has just released the numbers for real GDP growth of the United States for the final quarter of 2016 as well as for 2016 as a whole. These numbers were weaker than expected, at 1.9% growth in Q4'2016 and 1.6% growth for the year; numbers that were influenced by a variety of factors in the U.S.
Notable in this report is the prediction that this trend will not continue in 2017. Most economists are expecting the U.S. economy to achieve a growth rate of about 2.2% this year.
The pace of American economic growth could be a major factor contributing to the B.C. housing market in 2017. While an increase in growth in the U.S. usually means good things for us British Columbians, a stronger pace of growth (among other fiscal implications brought on by the Trump administration) seems also to be sparking an increase in long-term interest rates south of the border. This increase is consequentially pressuring Canadian mortgage rates and pushing the best offered rates of many lenders upward.
In Kamloops, as with across the province and the country, an increase in mortgage rates will have an impact on home buyers entering the market in 2017. Higher rates do not mean, however, that you should abandon your 2017 resolution to purchase a property! Buyers must simply make sure that they factor the possibility for inflated borrowing rates into their budget and seek the advice of their realtor, mortgage broker, and financial advisor as they plan their search for their dream home!
For the full article released by the BCREA, click here.
Team Cavaliere - River City Realty
Copyright British Columbia Real Estate Association. Reprinted with permission.