April 21st Mortgage Industry Update
April 21st, 2020 Mortgage Industry Update
The Bank of Canada announced on April 15th that its overnight lending rate will remain at 0.25%. The prime rate remains 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:
– CREA: Home sales across Canada fell by 14.3% in March compared to February. However, they are still up 7.8% compared to 2019. The national average home price climbed 12.5% from 2019 to $540,000. The number of properties newly listed for sale dropped by 12.5% annually.
– Bloomberg Nanos Canadian Confidence Index plunged to its lowest level since 2008; 38.7 reading as of April 13. Gloomy outlook especially applied to the residential property market: share of Canadians who are expecting home prices to decline was at 41%, versus 13% last month.
– Statistics Canada flash estimate: Canada’s economy shrank by 9% in March. The decline, StatsCan said, is the most severe since the series first began in 1961. March, as a result would drag down growth for the entire first quarter to -2.6%.
– Canadian Bankers Association: Almost 600,000 requests for mortgage deferrals or skipped payments have been completed/being processed since banks announced program on March 17. 213,000 were handled in the first 9 days of the program, and total requests reached 500,000 by April 3.
– TransUnion: 57% of Canadians said their household income has been reduced because of the economic fallout of the pandemic. Additionally, 10% of Canadian adults said they expect their household income will suffer in the future.
– Approximately 85% of tenants in Canada paid rent in part or full despite calls for an April rent strike during the coronavirus pandemic, says CIBC’s deputy chief economist Benjamin Tal. Rental brokerage firm SVN Rock Advisors: 90% of tenants paid rent in Toronto and Vancouver.
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.