August 24th Mortgage Industry Update
August 24th, 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:
– Bloomberg-Nanos Canadian Confidence Index: More than half of Canadians continue to believe that home prices will grow in the next half-year. Fell from 50.84% to 41.75% over past month, while share of Canadians who believe that the economy will become weaker instead was 24.23%.
– Lakelands Association of Realtors: Waterfront sales in Ontario’s Lakelands region (cottage country) were up over 275% in April compared to the same month in 2020, with the median price for waterfront property sales last month having risen by 36.8% to $833,500 compared with 2020.
– Only 184,000 people successfully immigrated to Canada, down 50% from the previous year. Lowest level since 1998. Federal government attempting to welcome 400,000 immigrants annually beginning this year. Calling for 401,000 immigrants in 2021, 411,000 in 2022, and 421,000 in 2023.
– Statistics Canada: Inflation accelerated to match its highest reading in almost two decades; up to 3.7% in July. It last hit that level in 2011. Haven’t recorded inflation above 3.7% since 2003. Economists were anticipating the rate to increase to 3.4%, from 3.1% in June.
– Bank of Canada: Bulk of mortgage debt growth during Q1 was mainly driven by double-digit increases in three provinces; Ontario, PEI, Quebec. Overall outstanding balance of mortgages drawn from Canadian banks stood at $1.48T, increasing by 1.5% from Q4 2020 and by 8.2% annually.
– CREA: Average home price in July was $661,788, up 15.6% year-over-year but down 3.5% from June, marking fourth consecutive monthly decline. Since March, the average price has fallen 7.7%. Home sales are also down, having fallen 28% from the March peak and 15.2% since last year.
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.