Rising rates add to pressure on housing

Home sales dropped to a five-year low in April and the surge in interest rates suggests the downward trend in sales has further to run. Although the Bank of Canada is still on the fence regarding the next move in its policy rate, Canadian government bond yields have continued to rise inexorably, taking their lead from US yields. The five-year yield reached a seven-year high of 2.33% earlier this week, which suggests that the five-year fixed conventional mortgage rate will soon be above 5.5%.