The Latest in Mortgage News: RBC downgrades its housing market forecast - Mortgage Rates & Mortgage Broker News in Canada

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"We expect local outcomes to vary widely with the priciest, more interest-sensitive areas facing larger declines, and relatively affordable markets showing greater resilience." He called the current correction "Historic," adding that buyers in the high-priced markets of Ontario and B.C. are "Especially sensitive" to interest rates and "Will struggle the most in the period ahead." The Bank of Canada's latest 100-bps rate hike in July is expected to "Speed up" the market's cooling phase, Hogue added. "While the move won't necessarily result in a higher terminal point-we still expect the overnight rate will reach 3.25% by October-it's a big bite for borrowers to swallow that will spoil or delay homeownership plans for many buyers," he said. "Solid demographic fundamentals and a low likelihood of overbuilding should keep the market from entering a death spiral." U.S. Fed and BoC back on par after 75-bps rate hike The U.S. central bank raised its benchmark rate by 75 basis points on Wednesday, matching the Bank of Canada's current rate of 2.50%. The move was fully expected by markets. In a press conference following the decision, Fed Chair Jerome Powell said he doesn't believe the U.S. is currently in a recession as "There are too many areas of the economy that are performing well," including its strong labour market. "With the Fed only now getting to what many would consider a neutral rate, there's still some further tightening that needs to be done to at least move rates into slightly restrictive territory," noted economists from National Bank of Canada. "It's clear that the Fed thinks the American economy will be able to withstand higher rates" Consumer confidence slips; affordability a key concern The Conference Board of Canada's consumer confidence index continued to fall in July, with inflation and affordability concerns top of mind. As prices and interest rates continue to rise, affordability remains a top concern for consumers.