Sept 20, 2022 – BoC Concludes House Prices Respond to Rate Hikes

The Bank of Canada updated its working paper “House Price Responses to Monetary Policy Surprises: Evidence from the U.S. Listings Data”. In it, the paper concludes that house prices react quicker than thought to monetary policy changes. In fact, listing prices drop 0.2% to 0.3% within two weeks of a monetary rate hike announcement. Because housing is a major indicator of household wealth, this finding has wide-reaching implications for ongoing monetary policy.

To review benchmark home prices across Canada, interact with the MLS Home Price Index below.