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Subject: June 2022 Inflation Report~
June
2022 Inflation Update~
Canadian Inflation -
Canadian prices, as measured by the Consumer Price Index (CPI),
rose 7.7 per cent on a year-over-year basis in May
, up from 6.8 per cent last month. This was the fastest growth rate since January 1983. According to Statistics Canada, price rises were broad-based, with groceries up 9.7 per cent year-over-year, gasoline up 48 per cent, and shelter costs up 7.4 per cent. Excluding gasoline, the CPI rose 6.3 per cent year over year in May. Month-over-month, on a seasonally-adjusted basis, prices were up 1.1 per cent, the fastest pace since the introduction of the series in 1992.
In BC, consumer prices rose 8.1 per cent year-over-year.
Average hourly wages grew 3.9 per cent year-over-year in May, indicating a decline in purchasing power.
A steep trajectory for the overnight rate implies that the
5-year fixed mortgage rate could reach the 5 per cent level
for the first time since 2009 while
variable mortgage rates may rise to as high as 4.5 per cent.
With the stress test for both insured and uninsured borrowers, prospective homebuyers are currently being qualified at a rate of 6.49 per cent with a strong possibility of qualifying at 7 per cent soon, a rate that has not been a reality in the Canadian mortgage market since the early 2000s.
Given how aggressive markets expect the Bank of Canada to be, any good news on inflation, or any significant deterioration in the Canadian economy, could see a significant reversal in the most recent jump in Canadian bond yields. However, the baseline case for now is a Bank of Canada that is single-minded in its pursuit of lower inflation.
*ASK ME ABOUT THE FIRST TIME HOME BUYERS PACKAGE AND AVAILABLE FINANCING PROGRAMS *
PS... If you need a recommendation to an excellent mortgage broker, send me a message.
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#193-1581H,Hillside Ave, v8t2c1, Victoria, Canada
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2022
June
June 2022 Inflation Report~
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