June 22nd, 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:
– Properly: By comparing the sale prices of GTA homes during the housing peak of January – April 2017 to the current; found significant increases in value across all housing types, with condos showing the greatest appreciation at 44%, followed by townhouses with condo fees at 33%.
– Statistics Canada: The net worth of the nation’s households increased by about $770 billion in Q1. Up 6% to $13.7 trillion. Households that own their home accounted for almost all of the gains in Q1 – $730 billion.
– Finder: Canadian home prices are likely to grow by an average of 5% in the next half-year or so. The most significant price increases by the end of the year will be seen in Hamilton, with an average gain of 9%. This will be followed by Toronto at 7%.
– Data from Statistics Canada showed that, overall, households saved an extra $167 billion last year. However, the figure sounds a lot larger than it actually is on a per capita basis, as the average net savings per household was $13,546 during the pandemic year.
– Equifax: Excluding mortgages, the size of the average consumer’s debt in Canada fell 4.2% in Q1 from 2020, to $20,430, while non-mortgage delinquencies dropped 22% in the same period. Mortgage delinquencies are themselves at an all-time low.
– Equifax: New mortgage borrowing rose 41% in Q1 annually. Average limit on new mortgages jumped more than 20% to $326,930. The increase in the number and size of mortgages Canadians are taking out drove the country’s outstanding consumer debts to nearly $2.1 trillion, up 4.78%.
– Canadian Bankers Association: Only 0.22% of mortgages from chartered banks are currently (March 2021) in arrears. National arrears rate hasn’t been lower than that since June 1990, and is well below the peak of 0.65% seen in January 1997. The rate is lowest in Ontario (0.09%).
Stay tuned for the next update!
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