March 21st, 2023 Mortgage Industry Update
The Bank of Canada announced on March 8th that its overnight lending rate will remain at 4.50%. This was the first hold-still since they started increasing rates a year ago. Inflation has started to inch lower. Latest data remains in line with the expectation that inflation will come down to around 3% in the middle of this year. Prime remains at 6.70%.
Additionally this week:
– CREA: National home sales rose by 2.3% monthly in February, however down 40% annually. Number of newly listed properties fell by 7.9% on a month-over-month basis, with the MLS Home Price Index dropping by 1.1% compared with January and 15.8% from February 2022.
– Urbanation: Average asking rent for all property types in Canada hit $1,984 in Feb, 2% decline since Nov, but 9.7% annual increase. First time since June 2022 that average rents have not risen by double digits. Figure still up 17.5% from 2021 levels, 11.1% above pre-pandemic.
– The average cost of farmland in Canada rose nearly 13 per cent in 2022, the biggest increase since 2014, according to a new report from government-owned agricultural lender Farm Credit Canada.
– Bank of Canada: Q4 2022 registered drastic decline in number of mortgage originations; 148,835 – significantly lower than pandemic-era peak of 279,682 seen in Q1 2021. Share of indebted households that were behind on their repayments for 60+ days spiked from 1.92% to 2.16%.
– Statistics Canada: Canadian employment grew more than expected for a third straight month. Economy added 21,800 jobs in February while the unemployment rate held at 5%, near a record low. Beat expectations for a small increase of 10,000 positions and a jobless rate of 5.1%.
– Equifax: Canadian consumer debt spiked by 6.2% in the last quarter of 2022 compared to the same time the previous year. Consumer debt sat at $2.37 trillion in Q4 last year, with mortgage debt accounting for 75% of that debt even as new mortgage originations continue to slow.
– Zolo 2023 Canada housing market report: Financial assistance from family members the new normal. 47% of homebuyers admitted they received money from family – either as a gift or through an inheritance – to help pay for their downpayment. 24% used money of their partner’s family.
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.