Mark Twain once said, "History doesn't repeat itself, but it often rhymes."
While he definitely wasn't talking about interest rate cycles, it seems the rate cycle forecast suggests home prices may drop in the least affordable provinces of Ontario and BC in the near future.
In the above piece, we Wowa Leads (wowa.ca & casaplorer.com) studied mortgage affordability over the past 50 years:
🔹 Unaffordability is at its highest point since 1991.
🔹 Historically, home prices fell during BoC rate cuts after the BoC rate peaks.
Why did home prices drop after the rate peak?
🔹 Lag Effect of Rate Hikes on Mortgage Holders in Canada.
🔹 Economic Deterioration in the Period (e.g., higher unemployment rates).
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