BMO’s latest housing outlook is predicting a drop in prices in Toronto and Montreal…but not yet. Senior economist Sal Guatieri says in a North American economic outlook that two of the hottest property markets will see “some correction” when interest rates rise. He isn’t predicting the decline to be more than moderate although has stopped short of putting a percentage on it. Interestingly the report says that Calgary will not be affected by interest rate rises in the same way due to rising population, strong economy and relatively affordable prices. A separate forecast from BMO suggests that both home sales and prices will be 5 per cent higher by the end of this year.