September 27th, 2022 Mortgage Industry Update
The Bank of Canada announced on September 7th that its overnight lending rate will increase to 3.25% from 2.50%. The prime rate has increased to 5.45% from 4.70%. Inflation globally and in Canada continues to rise. Central banks around the world continue to tighten as well. The Bank of Canada suggests that they will more than likely continue to raise interest rates as necessary to tackle higher than anticipated inflation rates.
Additionally this week:
– Scotiabank: Canadian home sales have fallen a total of 32% since the Bank of Canada started rising its policy rates in March – with the figures slowly inching toward pre-pandemic levels. Home sales slipped by 1% in August, marking the sixth consecutive month of declines.
– The RE/MAX Canada Housing Inventory Report analyzed active listings in eight major Canadian cities from July 2013 to 2022 and found that their inventory levels have fallen short of the 10-year average in seven of those markets in 2022.
– In a new Zolo survey of 1,183 homebuyers, results show that pandemic homebuyers do not regret buying a home. According to the poll, 84 per cent of Canadians who bought during the pandemic are happy with their purchase today.
– CREA: Average price of a home in Canada was $637,673 in August 2022, down 3.9% annually. Has fallen by more than 20% since February – six months in a row. While down from peak, average selling price is slight uptick from $629,971 seen previous month. Home sales down 24% annually.
– CREA has cut its forecast for home sales in 2022 and indicated lower price growth expectations amid a protracted housing market cooldown. Number of properties sold via Canadian MLS systems this year will likely fall by about 20% compared with 2021, with just over 532,500 sales.
– Statistics Canada: Canadian households experienced a decline of almost $1 trillion in net worth in Q2 amid plunging prices for homes and stocks. Value of residential real estate holdings held by households fell by $419 billion, while financial assets dropped by $531 billion.
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.