March 15th, 2022 Mortgage Industry Update
The Bank of Canada announced on March 2nd that its overnight lending rate will increase to 0.50% from 0.25%. The prime rate has increased to 2.70% from 2.45%. Economies are emerging from the impact of the Omicron variant of COVID-19 more quickly than expected. Overall economic growth is strong across the nation. The Bank of Canada suggests that they will more than likely continue to raise interest rates over this year to tackle higher than anticipated inflation rates.
Additionally this week:
– TRREB: There were 9,097 sales via the MLS in the GTA in February 2022. This represented a 16.8% decrease yearly. February home sales were down compared to the all-time record in 2021, but represented the second-best result for the month of February in history.
– TRREB: Average selling price for home in GTA surpassed $1.3M last month, up from $1M last February (28% gain) and more than $1.2M in January 2022. Average price of detached home hit more than $1.7M last month, semi-detached at $1.3M, townhouses at $1.1M, and condos nearing $800k.
– TransUnion: In Q3 2021, the number of mortgage originations rose 5.6% yearly, with proportion of Gen Z (those born between 1995 – present) mortgage borrowers surging 30%, well outpacing any other age group. However Gen Z only accounts for 4% of the overall mortgage market.
– Finder.com survey: 28% of Canadians are predicting property as the best performing asset for 2022 — but women are more likely to say so at 32%, versus 24% of men who believe real estate is the best place to invest in 2022.
– TransUnion: The overall credit market exhibited continued positive momentum in Q3 2021, spurred by a 5.6% annual increase in mortgage originations amid feverish competition in the housing market. Average mortgage balance increased by 11% annually to reach $320,835 in Q3.
– Statistics Canada: Canada’s economy grew at a robust pace in Q4 and was more resilient than expected in January. Output expanded by an annualized 6.7% in the three months through December, led by business spending. Followed growth of 5.5% in Q3. Economists were anticipating 6.5%.
– CMHC Rental Market Report: Toronto is only major Canadian city where rental apartment vacancy rates increased in 2021. During the year ending in October 2021, apartment vacancies climbed to 4.4% from 3.4%, contrary to the national trend which showed unit availability decreasing.
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.