March 22nd, 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:
– Statistics Canada: Value of real estate owned by households in Canada rose $1.5 trillion to $8.3 trillion in 2021. That increase lifted net worth per person in the country to $449,450 at the end of last year, up by nearly a quarter from 2020.
– Rentals.ca: Average rent for all property types listed in January was $1,807/m, up 4.4% from January 2021, 1% from December 2021. Still down from an average of $1,879 in January 2020 and $1,855 in January 2019. Single-family home average monthly rent up nearly 20% to $2,652.
– Statistics Canada: The country added 336,600 jobs in February, more than making up for losses in the previous month. Labor market blew past expectations. Economists were expecting a gain of only 127,500. The unemployment rate fell to 5.5 per cent, from 6.5 per cent in January.
– Sotheby’s International Realty Canada survey: Approximately 37% of urban Canadian Gen-Zs are expecting to purchase their first homes within the next five years, while 30% are anticipating a price range of $350,000-$499,000 and 26% are expecting to pay $500,000-$749,999.
– Statistics Canada: Uninsured residential mortgage volume held by chartered banks grew by 39.6% on a quarterly basis in Q3, and the value of insured mortgages was down by 3.6%. On the other end, non-bank mortgage lenders saw total value of their mortgages go up by 1.1% quarterly.
– Equifax Canada: 8.1% annual decline in new mortgage growth in Q4 2021. Most significant yearly slowdowns were registered in active markets; Toronto (down 16.1%), Hamilton (down 18.7%). However, 10.1% annual increase in the average loan amount for new mortgages, reaching $355,000.
– The share of mortgages in arrears over 90 days remained unchanged at 17 basis points in Q3 2021, according to Statistics Canada. This was the lowest level ever registered for the metric, StatCan said, coming at the tail-end of several quarters of declines.
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.