MLN NewsStream

• Housing liftoff: Real estate markets around the nation blasted off in April. It's going to make CREA's data release on Monday one to watch. Rumour is, the numbers are going to surprise a lot of people. If sales and prices surge as suspected, it'll reinforce buy-the-dip sentiment. It could even trigger a mini FOMO stampede of buying before summer. Alas, it could also light a fire under OSFI to roll out more, stiffer and/or quicker underwriting restrictions.
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Industry bellwether DLC Group is the poster child for what happens when interest rates soar.

Its funded volumes plunged 41% last quarter, compared to Q1 2022's record numbers. Its revenue dove 32% to $11.6 million.

Last May, mortgage fintech Pine.ca took in $27 million from investors who bet it would "disrupt" Canada's mortgage business.

We were nosy about how that was coming along, so MLN caught up with Justin Herlick, Co-founder and CEO of Pine Canada Financial Corporation. He was kind enough to update MLN on the company's progress and plan of attack going forward.

Here's what we learned...

This week, the lowest nationally-available variable, 2-year fixed and 10-year fixed, are all lower. Once again, borrowers have Nesto to thank. The online lender seems to be on a market share mission as of late.

Of particular interest is Nesto's 10-year fixed at 4.99% for insurable loans less than 65% LTV or greater than 80% LTV. The company's in-house lender slashed this rate by 76 bps since our last rate survey. Of course, few would/should bite on that offer near the top of the rate cycle, but it's impressive nonetheless. The next closest national lender is 70 bps higher.

"Inflation is coming down…. It's going to be 3% this summer, we think."—Bank of Canada's Tiff Macklem

Canada's 5-year yield rose five bps last week, nothing major. Spunky jobs data was the main reason.

Employment reports are backward-looking, however, while markets are forward-looking. Hence, the longer-term outlook hasn't changed much after April's data.

More important was the Fed removing its rate hike bias. Bond market participants now believe both the BoC and Fed will likely stay on pause. If those investors are right, we just got one week closer to rate "normalcy"—defined as policy rates reverting to their long-run neutral rates.