Mortgage rate cuts won't trigger housing rally

The decision by Canada's large banks to cut fixed mortgage rates ahead of the typically busy Spring home buying season won't boost sagging home sales. With housing so unaffordable, mortgage rates already incredibly low and mortgage lending rules tighter, we expect home sales to decline further. This slowdown will only worsen if benchmark bond yields rise as we expect. Accordingly, after averaging close to 457,000 sales last year, we expect home sales to average 430,000 this year and closer to 400,000 in 2015.