The Financial Post reports in its Friday, May 17, edition that many potential homebuyers are waiting for the Bank of Canada to lower interest rates before making a purchase. The Post's guest columnist Robert Mclister writes that according to a BMO poll by Ipsos, 72 per cent of Canadians are holding off on buying until rates decrease. There are two main reasons for this hesitation. Firstly, due to high housing prices, people need lower rates in order to pass the government's mortgage stress test, which requires borrowers to demonstrate that they can handle payments at rates that are 200-plus basis points higher than the contract rate. Lower mortgage rates would lower payments and reduce the percentage of income devoted to payments, thereby increasing buying power by over 8 per cent for every percentage drop in average rates. This would inject over $50,000 into the maximum home-buying budgets of Canadians based on the average home price. Secondly, potential buyers need to feel confident about the economic outlook. This is particularly true for those concerned about the possibility of a recession and higher mortgage defaults, despite the fact that leading economic indicators are showing improvement.