May 25th Mortgage Industry Update
May 25th, 2021 Mortgage Industry Update
The Bank of Canada announced on April 21st 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 the later half of 2022 now, as they observe the country’s faster than expected recovery from COVID-19.
Additionally this week:
– CREA: National home sales fell 12.5% in April from March, as new listings also declined 5.4%. 60,967 homes sold across the country last month, down from 69,702 in March, while close to 85% of all local markets, including almost all of B.C. and Ontario, saw sales declines.
– CREA: Canada’s average home price was $695,656 in April, down nearly 3% compared to March, but up 41.9% from last year. Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price still stands at $551,000, up 42% from last year.
– Nanos Research poll: Nearly 50% of respondents said they are at least “somewhat in favour” of an increase in the BoC’s overnight rate to blunt the non-stop increases in home prices. 70% of Canadians also agreed that current home price trends represent a major economic problem.
– J.D. Power survey: Canadians’ overall customer satisfaction in financial institutions declined this year with the drop most significant among the country’s Big Five banks. Satisfaction in midsized banking institutions increased. Only 43% of Canadians felt supported by their banks.
– Office of Superintendent of Bankruptcy: April insolvencies down 15.7% annually, when federal government instituted wage and income supports in the early days of pandemic. Number of consumer insolvencies filed across country fell a 37% over the last 12 months due to wage supports.
– CMHC: Home sales topped 550,000 in 2020, but could rise to 602,300 in 2021 before falling back to 547,100 in 2022 and 561,100 in 2023. Expects national prices to average $649,400 in 2021, which would mark a 14% rise from last year. Forecast average of $704,900 by the end of 2023.
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.