InvestorMind

Everything in moderation. Recent homebuyers can’t be cheered by forecasts of a looming slump in house prices so soon after paying record prices in what may be the tail end of a 13-year-long Canadian housing boom. But hold the Prozac. First, while house prices are widely forecast to soften this year, no one’s expecting a U.S.-style crash of the sort that had prices in overheated markets like Florida, California and Arizona plunging by 70 to 90 per cent between 2007 and 2009. That cataclysm set off defaults, foreclosures, a Wall Street meltdown, and the global Great Recession. By contrast, expect prices in admittedly overheated Canadian markets – conspicuously the GTA and Vancouver – to ease by 5 per cent to 10 per cent this year. And then to recover and begin making gains over purchase prices in 2013. There’s an unduly alarmist tone to the latest forecasts of declining Canadian house prices. The headlines give one the impression of an imminent sharp fall. A recent Maclean’s ...

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago. Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters. Read the full article here