May 15th Mortgage Industry Update
May 15th, 2018 Mortgage Industry Update
The Bank of Canada announced on April 18th that it’s overnight lending rate will remain at 1.25%. The prime rate thus remains at 3.45% with most lenders. The 5 year posted rate has officially increased with the Bank of Canada from 5.14% to 5.34%. Fixed rates are stabilizing from recent changes in the bond market.
Additionally this week:
– The Bank of Canada raised the conventional five-year mortgage rate from 5.14% to 5.34% after all Big Six banks raised their posted five-year fixed mortgage rates in recent weeks. The rate is the one used for stress tests.
– A new report from mortgage insurer Genworth Canada reveals that 59% of millennials are already homeowners, with 30% having bought a home in the past two years (including first-time buyers and repeat buyers). Among non-homeowners 30% say they intend to buy in the next two years.
– CMHC: Annual pace of housing starts in April slowed compared with March. The seasonally adjusted annual rate of new home construction, which is seen as a measure of the health of the housing market, fell to 214,379 units in April compared with 225,459 in March.
– CMHC says that its mortgage loan insurance and securitization business generated net income of $1.8 billion in 2017. It provided mortgage loan insurance for more than 250,000, 65% of which supported first-time buyers, and 14% were for buyers in rural areas.
– BMO report: Rising interest rates do not appear to be discouraging Canadians sufficiently from buying homes. 23% are still planning to purchase their primary residences in the next year, for an average expected price of $474k (national), $580k (Toronto), $603k (Vancouver).
– Zoocasa’s 2018 Housing Trends Report found that 84 per cent of Millennials surveyed felt that owning a home was an important life milestone. However, OREA: 68.5% of young Ontarians agree or somewhat agree that home ownership remains unaffordable in their neighborhood.
Stay tuned for the next update!
For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.