![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2019\/08\/bank-of-mom-and-dad-housing-market.jpg\")
<\/a><\/p>\nPhoto:\u00a0Fabian Blank<\/a>\/Unsplash<\/a><\/em><\/p>\n Of all the surprises that 2019 had in store for Canadian home buyers, consistently low mortgage rates were certainly among the more pleasant and unexpected.<\/p>\n Earlier in the year, the consensus opinion among market experts was that the Bank of Canada would surely hike its mortgage-market influencing overnight rate and mortgage rates would follow that path upward. Some even felt it was likely that rates would increase more than once.<\/p>\n Meantime, contrarians said a rate cut before the end of the year was far more likely as the global market appeared to be sliding toward a recession and the Canadian economy would need the stimulus to prevent long-term damage.<\/p>\n\n The central bank responded by doing neither of these things; its influential overnight rate didn\u2019t budge all year. The decision to leave the overnight rate untouched caused mortgage rates to dip as lenders competed for mortgage applicants. Rates stayed low all year and bottomed out in August before rising marginally through the fall. This not only boosted home buying, but also increased the purchasing power of buyers.<\/p>\n According to Stephen Brown, an economist at Capital Economics, a homebuyer could afford to spend 10 percent more on a home at the August mortgage rate low-point than what they could have afforded late in 2018. As a result, homebuying surged in many major Canadian cities to the point where a rate cut from the Bank of Canada would only throw gas on the fire and potentially overheat the market.<\/p>\n \u201c[G]iven its concerns about elevated household debt, we think the Bank will avoid providing further stimulus to the housing market by keeping interest rates on hold throughout 2020,\u201d wrote Brown in a note titled \u201cResurgent housing market to keep Bank on hold\u201d that was distributed to clients earlier this week.<\/p>\n BMO economist Benjamin Reitzes appeared to share Brown\u2019s belief that rate movement isn\u2019t in the cards for the foreseeable future.<\/p>\n \u201cBarring a negative shock hitting the economy, it looks like the BoC could be on hold for some time yet,\u201d he wrote in a research note last week.<\/p>\n Some market commentators foresee further declines in the already low mortgage-rate environment.<\/p>\n