June 15th, 2021 Mortgage Industry Update

The Bank of Canada announced on June 9th 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:

– The majority of economists (55%) believe that the Bank of Canada overnight rate will hold for just 12 to 18 months more, according to the latest survey by Finder. The central bank’s rates could start moving up again in earnest beginning the second half of 2022.

– 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!

– Statistics Canada: The economy lost 68,000 jobs in May. That adds to the 207,100 positions lost in April. The unemployment rate rose to 8.2 per cent, from 8.1 per cent. Economists in a Bloomberg survey had predicted a loss of 25,000 jobs, with a jobless rate of 8.2 per cent.

– Condo listing site Strata(.)ca: GTA condo sales dropped for 2nd straight month in May. Condos sales actually up this May compared annually, but down 23% compared to March 2021. Prices slightly down at $1,066 per sqft downtown compared to $1,091 per sqft the month before.

– TRREB: May GTA home sales were 11,951, down 9% from 13,663 in April but up from 4,594 in 2020. Average price was $1,108,453 compared with $1,090,992 in April and from $863,563 last May (up 19% annually). Previous record was set in March, at just shy of $1.1 million.

– Knight Frank’s Global House Price Index report: Housing prices worldwide are rising the most since before the global financial crisis. Average prices jumped 7.3% in the 12 months to March, the fastest pace since Q4 2006. Turkey topped the list at 32%. U.S. placed 5th at 13.2%.

– Statistics Canada: Economy grew at an annual rate of 5.6% in Q1. Represents a slowdown from 9.6 % annualized growth seen over Q4 2020. Quarter ended with an increase of 1.1% in real gross domestic product in March, following the 0.4% registered in February.

 
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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