March 23rd, 2021 Mortgage Industry Update

The Bank of Canada announced on March 10th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada suggests that they will more than likely keep rates at this “effective lower bound” until 2023, as they observe the full effects of the pandemic. Due to recent increased confidence in the markets, fixed rates have been slightly increasing. 

Additionally this week:

– CREA says it expects 700,000 properties to trade hands in 2021, which would be 27% increase from 551,262 sales in 2020. Prices expected to continue rising by 16.5% on an annual basis to $665,000 for the whole of 2021, and more moderate increase of just 2% to $679,341 in 2022.

– CREA: Outlook suggests home sales will remain strong this year, resulting in a record number of sales, but then start to cool in 2022. Home sales in February up 6.6% compared with January and up 39.2% annually. The actual national average home price is a record $678,091, up 25%.

– CMHC: Seasonally adjusted annual rate of housing starts for February fell to 245,922 units compared with 284,372 in January. Drop came as annual pace of urban starts fell 14% to 231,042 units as pace of starts of apartments, condos fell 15.8% to 163,757.

– Statistics Canada: Mortgages push to $34.9B in Q4 2020 – beating previous high of $28.7B set in Q3. Residential real estate increased 3.3% in value, 2nd consecutive quarter of strong growth. National net worth overall increased to $357,955 from $343,172 on a per-capita basis.

– CMHC: Mortgage delinquency rates fell in most cities in Q4 2020. Only six markets saw year-over-year increases in the share of delinquent borrowers. The other 26 major housing markets posted lower mortgage delinquency rates. Toronto’s rate fell by 9.09% annually.

– The Bloomberg Nanos Canadian Confidence Index stood at 60.4 in the week ending March 05. By comparison, the Index four weeks prior was at 56.52, while the 12-month high was at 60.47. Highest level since January 2018. All measures within are above their 14-year average.

– Finder.com poll: 52% of economists predict that the Bank of Canada’s overnight rate will remain on hold up to at least 2023. Another 38% believe that the rate will move upward in the second half of 2022, while just 9.5% believe that a hike will happen early next year.

 
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.

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