July 27th Mortgage Industry Update
July 27th, 2021 Mortgage Industry Update
The Bank of Canada announced on July 14th 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:
– Zumper: Toronto rents fell to fourth place nationally, with the median of $1,710. Barrie came in third in June with the median monthly rate of $1,730. First time ever that Toronto has been out of the top two, with one-bedrooms seeing the largest monthly decline across Canada.
– CMHC: 65% of recent buyers bought the maximum amount of house they could afford. For 6 in 10 buyers, that amount was less than $500,000, while 8% of buyers spent over $1M on their purchases. 27% said they paid more than they had planned on their home, 20% said they paid less.
– CMHC: 85% of Canadian homeowners said that they encountered “no difficulties” in maintaining their mortgage payments during the pandemic, although 31% of home buyers reported experiencing a bidding war.
– Equifax Canada: Hot housing market was behind a 41.2% annual increase in new mortgages as of Q1. Average mortgage amount also rose by 20.5% to $326,903. Increased mortgage demand pushed consumer debt in Canada to $2.08 trillion, up 0.62% from previous quarter and 4.78% annually.
– Rentals.ca: The average residential rent in Canada has increased for the second month in a row, rising to $1,721 in June. Represents a 0.7% monthly increase, slower than the 2% pace seen in May but a steady recovery from a six-month streak of declines earlier this year.
– Leger Marketing survey: 47% of Canadians have owned their home for five or more years. As a proportion of Canadian homeowners 76% first entered the real estate market at least half a decade ago. Have amassed at least 35% equity (more than $175,000) on average.
– Lumber prices have crashed in a short time span, taking only eight weeks to tumble 70% from record highs. Price was US$485 for 1,000 board feet this week for two-by-fours compared with US$1,630 in mid-May, according to Random Lengths, an Oregon-based company.
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.
