July 21st Mortgage Industry Update
July 21st, 2020 Mortgage Industry Update
The Bank of Canada announced on July 15th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada has openly stated that it will more than likely keep rates at this “effective lower bound” for the immediate future until the effects of the pandemic are more clear.
Additionally this week:
– Bank of Canada Governor Tiff Macklem: “Interest rates are very low and they are going to be there for a long time”. Observers say that implies the Bank has no plans to start raising rates until at least 2023. 0.25% remains its “effective lower bound”.
– Royal LePage: Housing prices in Ontario saw the biggest jump in country last month. Mississauga saw highest appreciation, as prices jumped by 13.5% to $851,858 compared to 2019. Predicting the aggregate price of a home in the GTA will rise by 4% towards end of 2020 to $882,000.
– Bloomberg-Nanos Canadian Confidence Index survey found that 13% of respondents felt that their finances have improved over the past year. 37% said their situation has worsened. 57% believe economy will worsen over the next half-year. 16% expressed fears about their job security.
– Bank of Canada stands still on the overnight rate at 0.25%. Good news for variable rate mortgage holders as there is no expected change in prime rates!
– Finder.com study: 81% of economists are expecting the Bank of Canada to keep the overnight rate at 0.25% in its July 15 meeting, with the hold lasting for more than a year. Around 63% of respondents also said that the rate won’t move until sometime in 2022 or 2023.
– Statistics Canada: Employment numbers rose by 952,900 in June as lockdown restrictions began to ease. Added to the 290,000 jobs created in May. The two-month total represents just over 40% of the 3 million lost in March and April, when mandatory business closures were imposed.
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.