June 28th, 2022 Mortgage Industry Update
The Bank of Canada announced on June 1st that its overnight lending rate will increase to 1.50% from 1.00%. The prime rate has increased to 3.70% from 3.20%. Inflation globally and in Canada continues to rise, largely driven by higher prices for energy and food. Canadian economic activity is strong and the economy is clearly operating in excess demand. 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:
– Mississauga Real Estate Board: May 2022 benchmark apartment price was $762,500, a substantial increase of 32.3% from a year ago. The increase is double that of single-family homes. Townhouse/row units were $912,900, up by 17.4% compared to a year earlier.
– CREA expects national avg home price to rise 10.8% in 2022 to $762k, down from previous forecast of $786k. New forecast is now roughly $70k lower than its initial 2022 forecast released in December. Ahead to 2023, expects home prices to post a modest 3.1% annual gain to $786k.
– CREA: May average home prices dipped to $711,316. Down 4.6% from the previous month and nearly 13% from February. However prices remain 3.4% above year-ago levels. Home sales are down 8.6% from April. Sales were down in three-quarters of all markets.
– Rentals.ca: Average rent for all property types now $1,888/month. Up 10.5% yearly (3.7% monthly) and on its way to pre-pandemic record of $1,953 (September 2019). Average rents are now nearly 13% above the low of $1,676 recorded last April in the midst of the pandemic.
– Statistics Canada: Those in the 15-29 (53%) and 30-39 (39%) age brackets were much more likely than those aged 40 and above (20%) to report being “very concerned” about their ability to afford housing or rent.
– TRREB: Overall, prices for all home types in Oakville are falling, from an average sale price of $1,691,997 in April to $1,495,926 last month. This represents a 12% decline. For detached homes the average in April was $2,146,994. May saw an 11% drop to $1,929,573.
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.