March 31st Mortgage Industry Update
March 31st, 2020 Mortgage Industry Update
The Bank of Canada held another emergency rate announcement on March 27th and cut its overnight lending rate from 0.75% to 0.25%. The prime rate has decreased to 2.45%. The possibility of further rate reductions remains unclear at this time as the economy deals with the COVID-19 pandemic.
Additionally this week:
– Conference Board of Canada analysis predicting social distancing will cause nation’s GDP to fall by 1.1% this year instead of growing by baseline forecast 0.3%. Also estimating that Canada could lose more than 330,000 jobs over Q2/Q3; would spike unemployment rate to 7.7%.
– “I am calling on all Realtors to cease holding open houses during this crisis and advise their clients to cancel any that are planned,” said Sean Morrison, President of the Ontario Real Estate Association. The Toronto Regional Real Estate Board made a similar appeal to members.
– Effective Monday March 23, 2020 the Bank of Canada has dropped the qualifying mortgage rate from 5.19% to 5.04%.
– Teranet-National Bank Composite House Price Index found home prices in February were up 0.4%; double the average rise of the last 10 months of February. Was up 2.9% from February 2019, marking 7th consecutive month of annual acceleration and strongest level since December 2018.
– Canada’s mortgage lenders are working together on their response to the current crisis. Financial support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products. Please contact your lender directly to discuss options.
– CREA: February sales jumped almost 27% compared to 2019, and rose about 6% from January 2020. Sales were at a 10-year low last February. Benchmark prices across the 19 markets CREA tracks up 4.55% year-over-year to $648,600. Average prices up 15.2% to $540,000.
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.