February 1st, 2022 Mortgage Industry Update
The Bank of Canada announced on January 26th 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 raise interest rates sometime this year to tackle higher than anticipated inflation rates.
Additionally this week:
– CMHC: Chartered banks saw mortgage originations grow by 11% (totalled $58 billion) in Q3, a growing percentage of which were uninsured mortgages (typically meaning those with a down payment of more than 20%). Increase of 60% compared to 2020 and nearly double the volume from 2019.
– Royal LePage study: Majority of Boomer homeowners — 52 per cent — would prefer to renovate their current property over moving. The study also found 75 per cent of Boomers own their own home, and 17 per cent more than one property.
– Bank of Canada stands still on the overnight rate at 0.25%. Good news for variable rate mortgage holders as there is no expected change in prime rates!
– RE/MAX Canada: Greatest growth in sales of residential properties valued at more than $1M in 2021 was seen in smaller markets such as Barrie (518%), London (255%), Kitchener-Waterloo (208%), and Hamilton (200%). Over $3M were recorded in GTA (113%) and Metro Vancouver (76%).
– Statistics Canada: The cost of a new home rose another 0.2% between November and December, helping boost real estate prices by the most since the 1980s. Price of a new home rose 10.3% compared to 2020, marking the biggest year-over-year increase since 1989.
– Bank of Canada: First-time homebuyers remain largest group of home buyers (50% of home purchases since 2014). Repeat buyers represented 31%, investors were 19%. On an annual basis, number of investor purchases went up by 99.39% in 2021, compared to 66.11% in repeat purchases.
– Statistics Canada: Consumer price inflation accelerated to the fastest level since 1991 last month in December. The number hit 4.8%. This was up from 4.7% in November. The December number was in line with economists’ expectations.
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.