When you watch your favorite weather forecast you know that sometimes it will be right on ... and the rest of the time it will be oh so wrong. The lucky thing for weather forecasters is that they get paid no matter how right or wrong they are!
Ditto with Economists.
Economic forecasting has to be even more difficult than the weather because they have no satellite maps to look at. As a result the forecasts are often so vague that you don't know exactly what they are saying.
Over the past few months we have watched as the economists have predicted Bank of Canada rate increases for July. Now it appears the forecasters have changed their minds.
As of today, the Economic Predictions are that there will be NO mortgage rate increases THIS year.
The economists are citing factors such as:
- Weak economic recovery in the US, including a weak housing market
- Increasing unemployment rates in the US
- Global economic crises (i.e. Greece)
- Increasing Canadian house-hold debt
- The Canadian Dollar
- ... and more
The consensus appears to be that we WILL NOT see a rate increase in 2011.
The Banks and other major Financial Agencies spend millions of dollars on Economic forecasting. Every minute bit of financial data and global economic information is analyzed again and again. In spite of this, economic forecasting appears to be as accurate as predicting the weather.
The forecasts DO have a purpose. They provide us with general economic direction, and highlight the factors that could change and effect the Canadian economy, or the housing market in Vancouver.
Who knows what will happen if Greece doesn't meet its obligations to the European Union. Who knows what will happen if Canadians actually listen to Mark Carney about our ever increasing household debt! Trying to stay ahead of the game is why we pay attention to the Economic forecasters in spite of their infallibility.
If all the forecasting reversals and uncertainties have YOU spinning in circles, that is what we are here for. We can help you access your risk tolerance and the current forecasts to determine what the best mortgage choice is for you. Should you lock-in, or should you choose a variable rate? It all depends on YOU, and yes ... on the current economic forecasts!
If you want to know how the current forecasts affect YOUR mortgage or mortgage choices, give us a call 604-736-1855 .
