Mortgage brokers express concerns over industry

Data from a Canadian Mortgage Professional poll provides a special insight into what issues facing the current real estate market most concern mortgage brokers.

"No, the sky isn't falling, say the majority of brokers responding to CMP's fifth-annual Sentiment Poll, but their answers – recorded over a six-month period ending early March – suggest headroom is getting tight," reads the report. "Even with interest rates falling instead of rising, broker worries have grown right along with economic uncertainty and the creeping slowdown in home sales more stringent mortgage rules have ushered in."

Figures from the poll show that 66 percent of brokers are concerned with the stricter underwriting guidelines put in place by Finance Minister Jim Flaherty, an increase from 56 percent during 2012. Meanwhile, 42.33 percent of respondents said home sales were their chief worry, with another 32 percent pointing to falling home prices.

However, data from the poll does reveal some bright spots.

Approximately 95 percent of mortgage brokers who responded to the poll said they would not be leaving the industry in the next 12 months, with an even higher number of respondents (98 percent) agreeing that residential mortgages will remain the cornerstone of their business.

Mortgage rates remain low
Part of this optimism regarding the residential market must be attributed to mortgage rates or, more accurately, the way mortgage rates continue to hover near record lows, which gives potential homebuyers more incentive to purchase.

As reported by Mortgage Broker News, Bank of Canada Governor Mark Carney has made it clear once again that while mortgage rates will eventually rise, they will not be doing so any time soon.

"In a flurry of online, television and newspaper interviews recently, Carney initially hinted that rates could rise if personal debt isn't adjusted in a more timely way … ," the news source states. "However, Carney later stated that any rate increase would be predicated on several factors, including a minimum rate of economic growth and a stronger housing market."

Meanwhile, Canadian Mortgage Trends spotlights the fact that conventional wisdom from industry observers points to no forthcoming rate changes.

"The Bank of Canada's Mark Carney continues to maintain that "the next move (in rates) is likely to be up," writes Rob McLister for the news source. "But if the next move is indeed up, it won't be happening this year – that is, if you believe the forecasts of virtually every economist in Canada."

So what does this mean for prospective homebuyers? It means that now is the time to take advantage of ultra-low mortgage rates. With rates set to remain low, buyers have the opportunity to lock them in with a fixed-rate mortgage before economic factors drive them up. After all, while rates remain low for the foreseeable future, the real estate market can change dramatically at the drop of a hat, making it wiser to invest sooner rather than later.

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