April 20th Mortgage Industry Update
April 20th, 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:
– StatsCan figures revealed that the nation’s three largest cities – Toronto, Montreal, and Vancouver – have seen record-high population losses between July 2019 -July 2020. Toronto recorded 50,375 more people leaving for other areas in Ontario compared to those coming in.
– Statistics Canada: The economy added 303,100 jobs in March. That’s triple what economists were anticipating, and follows a gain of 259,200 in February. The country has now recovered all but 296,000 of the nearly 3 million jobs lost during the pandemic.
– Angus Reid survey: 40% of Canadians hoping home prices exhibit future growth. 14% expecting increases of 30%+. 39% are looking forward to a generalized decline, with 22% saying that they’d like to see prices fall by 30% or more. 21% said that prefer price levels to remain same.
– OSFI has launched a new consultation on its B-20 stress test. Under the proposal tabled, the minimum qualifying rate for uninsured mortgages would be the contract rate plus two percentage points or 5.25%, whichever is higher. Proposing to revisit the qualifying rate annually.
– RE/MAX Canada survey: “Lifestyle impact” is top reason for home renovations – with 29% of respondents saying they are renovating to enhance their lifestyle for non-essential reasons, 29% saying they are doing so for essential reasons. Only 16% said to increase value of their home.
– Angus Reid survey: Canadians are divided on what the future of home prices should look like, with 40 per cent hoping they rise from current levels, 39 per cent of respondents expecting a decline while 21 per cent of people polled want the status quo.
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.