housing market posts

"People haven't saved enough for retirement."

There's a lot of research talking about Canadians' lack of retirement savings. It looks like people are buying into those messages too.

Unfortunately though, the information appears to be affecting the would-be retiree's psyche, with troubling results: Half believe they'll exhaust their retirement savings in less than 10 years, but a significant number don't know for sure, and a large number of people won't even consider certain income options.

"This all suggests to me that people are trying to avoid thinking about it," says Investor Education Fund (IEF) president, Tom Hamza.

The coming year will bring some pretty important changes to the Canadian financial ecosystem. Every Canadian should be aware of the following five shifts that will impact both the national and household economies.

House Prices
So the bubble may not be popping but the housing market is definitely slowing down. The Canadian Real Estate Association recently released its latest sales numbers that show a 1.4 per cent decline in home sales for late 2012. One factor may be recent tinkering in the mortgage market such as shortening amortization periods. This trend is particularly important because many people -- particularly young families and young professionals -- have tied their financial ships to their houses. If homes aren't moving, this impacts their value and creates a buyer's market. For families hoping to cash in on a hot market -- whether by selling or tapping into their equity -- 2013 may not be the time.

If you're in the market for a new house or simply looking to
renew your existing mortgage, I'm sure you've noticed the "Mortgage War" being waged by most of Canada's big banks. RBC, TD, Scotiabank and BMO have been offering long term, fixed rate mortgages for 2.99 per cent. This is among the lowest fixed rate mortgages you're likely ever to see.

On the one hand, this has been a bit of a strange move from an industry that has expressed worries in the past about mortgage debt in Canada. On the other hand, now might be a terrific opportunity for first-time buyers to get into the market. So, what should you be conscious of if you're thinking about a rock-bottom mortgage rate?

It's that time of the month again, when we take a look at housing markets across Canada to see what a cool half million will get you in different cities.

What $500K Buys, Coast to Coast (PHOTO GALLERY)

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Housing prices are in a strange place at the moment and it's a little difficult to see where they might go. This summer, one economist's report calls for price moderation in the different Canadian housing markets. Shortly after that, another report told us housing price affordability continues to deteriorate across the country.

In between, just to keep things interesting (oh yah, and to fuel economic expansion), the U.S. Federal Reserve surprised many when it announced it plans to keep interest rates near zero until the middle of 2013.

So then, if you're wondering what it all means for the price of your home, or the price of homes you haven't put an offer in on yet, here's a quick distillation of what the economists have to say.

Home buyers are faced with a tough decision when looking for a mortgage: take a risk on a variable mortgage or choose the security of a fixed-rate?

Variable rate mortgages gained popularity during the financial crisis as the Bank of Canada slashed the benchmark interest rate to a record low 0.5 per cent, causing variable rate mortgage costs to tumble with it. But now that the central bank is hiking rates, even if the key rate is only at 0.75 per cent, it appears fixed rate products are making a comeback.

An article in the Financial Post points out that while variable rates are still low, fixed-rate mortgages are looking quite cheap. Jitters around the globe about economic stability and a second bout of recession have caused investors to pile their money back into government treasuries, which means the yields on the bonds fall. Banks use these yields to determine fixed-rate interest rates, and as a result, fixed-rate mortgage costs are coming down. But just how low are they?

It's the outcome no one wants, a second recession - the 'double dip,' also known as the 'W-shaped' - but economists are beginning to increasingly fear that the U.S. will drag us back into the red.

It's something the economic community has speculated about since the U.S. first entered recession at the end of 2008, sparking a financial crisis that took the rest of the world down with it. Some economists have believed from the start that once stimulus programs began to unwind that the U.S. economy would drop into a second recession. Those concerns have strengthened after the U.S. jobs report last week showed that employment actually fell for the first time this year.

So how likely is Canada to fall back into recession?