![\"oil-canada-housing\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2018\/12\/oil-canada-housing-1.jpg\")
<\/a>\nPhoto: Kurt Bauschardt\/Flickr<\/a><\/em><\/p>\n
Not everyone is on the same page when it comes to where mortgage rates in Canada are headed.<\/p>\n
Many observers expect the Bank of Canada will continue to increase the overnight rate, which influences the mortgage market.<\/p>\n
Capital Economics, a London-based economic research consultancy, is not one of them.<\/p>\n
\u201cBy contrast, we think that weak prospects for domestic demand will cause the Bank to remain on hold for most of 2019, before cutting rates at the tail end of next year,\u201d reads a Canada Economic Outlook report.<\/p>\n\n
Capital Economics suggests that lower oil prices and reduced housing investment will weigh on economic growth and encourage the central bank to walk back at least one of five rate hikes it\u2019s made since July 2017.<\/p>\n
Reducing rates in late-2019 rates should help Canada\u2019s economy grow by 1.7 percent in 2020, Capital Economics estimates, an improvement over 2018\u2019s estimated expansion of 1.5 percent.<\/p>\n
Most recently, the bank increased the overnight rate by 25 basis points in October, bringing it to 1.75 percent. At the time, the Bank of Canada noted Canada\u2019s housing market is \u201cstabilizing,\u201d a statement that one big bank recently questioned<\/a>.<\/p>\n Still, Capital Economics\u2019 expectation that the central bank will backpedal on monetary policy runs contrary to what most other observers are saying.<\/p>\n Just this month Benoit Durocher, a senior economist for Desjardins, said that Canada\u2019s mounting household debt should lead the Bank of Canada to continue on its path of rate hikes.<\/p>\n