It is always wise, when gauging market expectations, to remember that the market reserves the right to change its mind and sometimes does so very quickly. To illustrate, here is a chart comparing market expectations of the probability of a 25 basis points change in the Bank of Canada overnight rate by the end of 2012 - observed before and after the latest Bank interest rate decision.

From this chart we can discern that the market believes it is three times more likely that the Bank will raise interest rates before the end of the year, than it did the day before the Banks’ announcement. 

Of course, in terms of impact on the economy or the housing market, it is trivial whether the Bank of Canada decides to raise rates in December or waits a month or two longer. What is important is that the Bank is signalling that its preference is for higher interest rates relatively soon. That preference in turn should translate to an increase in long-term interest rates including mortgage rates, that is, unless something happens to change the markets mind.