July 13th, 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:
– A new joint study by MoneySense and Zoocasa has highlighted the most financially challenging Canadian markets for prospective home buyers. Vancouver ranks first, followed by Oakville-Milton, Toronto, Mississauga, and Victoria respectively.
– Altus Group: Total of 3,661 new homes sold across GTA in May; 5% higher than 10 yr avg. Condos were 2,396, 10% above 10 yr avg. Benchmark price up by 12% annually to $1.064M. 1,265 single-family homes sold, just 3% below 10-year average. Price up by 24.4% annually to $1.38M.
– TRREB: Home sales in Toronto fell 9.1% in June from the month before to 8,885 transactions (lowest number of homes trade hands in a year), the third consecutive monthly decline. Seasonally adjusted average price of a home remained virtually unchanged last month at $1.06 million.
– Effective July 5, 2021 CMHC is returning to pre-July 2020 underwriting practices for homeowner mortgage loan insurance. They will now consider a Gross Debt Service ratio up to 39% and Total Debt Service ratio up to 44% for strong borrowers.
– Statistics Canada: Real gross domestic product fell 0.3 per cent in April, which was better than an initial estimate a few weeks ago of a drop of 0.8 per cent. It was the first decline in real GDP since April 2020 during the first wave of the pandemic.
– According to a recent Royal LePage survey of boomers in Canada, 35% of the cohort – or approximately 3.2 million boomers – said they are considering a home purchase within the next five years. Nationally, 45% of respondents believe now is a good time to sell their home.
Stay tuned for the next update!
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