September 21st, 2021 Mortgage Industry Update

The Bank of Canada announced on September 8th 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 recovery from COVID-19. 

Additionally this week:

– Statistics Canada: Mortgage borrowing hit a record in Q2 as the amount Canadians owe relative to their income climbed higher. On seasonally adjusted basis household credit market debt as a proportion of household disposable income rose to 173.1% compared with 172.6% in Q1.

– Statistics Canada: The total value of building permits in Canada fell by 3.9% month over month to approximately $9.9 billion in July. Of this total, $6.971 billion was in the residential sector, while $2.927 billion was in the non-residential segment.

– Borrowell: Homeowners hold approximately 19.5 times more total debt ($393,887) than non-owners ($20,183), but non-owners are 2.2 times more likely to have skipped some scheduled payment. Share of homeowners with missed bill payments was around 11%, while non-owners was 21%.

– Statistics Canada: The total value of deferred mortgages associated with non-bank lenders fell for the 3rd consecutive quarter, dropping from $8.6 billion in Q4 2020 to $6.9 billion in Q1 2021, amounting to a 20.1% decline. A total of 29,713 mortgages were deferred (down 16.7%).

– Statistics Canada: Wealth gap narrowed in 2020, as net worth for poorest 40% of households increased at faster pace than for wealthiest 20%. Total household wealth jumped 10.5% to $12.9T. For bottom 2/5 of households, wealth grew by 23.5%, higher than 8.9% increase for top fifth.

– Office of the Superintendent of Bankruptcy: Canadian consumer insolvency (bankruptcy) levels dropped by 11.3% month over month in July, remaining below pre-pandemic levels. Over the 12-month period ending July 31, the number of Canadians who filed for insolvency dropped by 22.6%.

 
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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