RBC Reports: Mortgage rates to rise, but housing market to be stable over the next two years

RBC came out and reported that they expect the Bank of Canada to raise rates as much as 1% this year and 1.5% in 2012. A fairly bold statement, but the best news from the article is the positive statements made regarding the economic recovery.

“Going forward, we see nearly perfectly offsetting forces driving Canada’s housing market,” he said. “On the upside, the economic recovery will gather strength in 2011, continuing to boost employment and family incomes.

“Even though mortgage rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity,” CREA chief economist Gregory Klump said. “Strengthening economic fundamentals will keep the housing market in balance, which will keep prices stable.”

Click here to read the complete article from The Globe and Mail.