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Last year’s mortgage rule changes placed roadblocks in front of millions of would-be buyers, but increased rates and future regulatory action may prove even more difficult for them to overcome.

That’s according to one leading economist, who argues the latest rate increases and the addition of another round of mortgage rules represent major hurdles in front of prospective homeowners.

“The posted mortgage rate has now increased 20 basis points to 4.84%, which is of particular importance because since October 2016 this is the assumed borrowing rate at which mortgage applicants must qualify for insured loans,” Dr. Sherry Cooper, chief economist for Dominion Lending Centres, wrote in her report on CREA’s latest data. “The Office of the Superintendent of Financial Institutions (OSFI) issued a proposal in July to tighten the qualification criterion for uninsured borrowers as well--that is, those that put at least 20% down on their home purchase. If the proposal were implemented, high loan-to-value mortgage borrowers would need to meet debt-servicing requirements at mortgage rates 200 basis points above the contract rate.

“Many believe this would have an even bigger negative impact on housing than the October 2016 measures.”

The Bank of Canada raised its target for the overnight rate to 1% earlier this month.

OSFI, meanwhile, is currently receiving consultation on its latest suggest mortgage policies, which include a qualifying stress test for all uninsured mortgages, as well as a crackdown on bundled mortgage loans.

If OSFI’s measures pass as currently written, they are expected to make it more difficult for Canadians to qualify for a mortgage.

However, with that – and the threat of further interest rate increases – on the horizon, brokers can likely expect an influx of potential clients in the coming months before a slight dampening in demand.

“Experience shows that home buyers watch mortgage rates carefully and that recent interest rate increases will prompt some to make an offer before rates move higher, while moving others to the sidelines,” CREA President Andrew Peck said last week.