May 2nd, 2023 Mortgage Industry Update
The Bank of Canada announced on April 12th that its overnight lending rate will remain at 4.50%. This was the second hold-still since they started increasing rates a year ago. Inflation has started to 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:
– Statistics Canada: Household credit growth picked up a bit in February, rising by 0.3%. Total household borrowing rose by $9.3 billion in the month to $2.83 trillion, with mortgage debt rising by 0.3%, and growth in other forms of borrowing accelerating by 0.4%.
– Sotheby’s International Realty Canada: In Toronto, Q1 2023 sales of luxury homes priced $4M and higher fell 64% from the first quarter of 2022. Transactions of houses above $1 million also slowed, declining 57% over last year. Only one home over $10M changed hands vs 8 last year.
– Royal LePage is forecasting that the average price of a home in Canada will increase 4.5% in the fourth quarter of 2023, compared to the same quarter in 2022. This revised forecast anticipates an earlier-than-expected boost in activity in major housing markets across Canada.
– Statistics Canada: National annual inflation rate dropped to 4.3% last month, meaning it now sits at its lowest level since August 2021. Said inflation had fallen by nearly a full percentage point over February, when it came in at 5.2%, in a sign that rate increases are working.
– The City of Brampton has green-lit a new landlord registration and licensing program with the hopes of curbing illegal rentals and inviting more accountability into landlord-tenant dealings.
– CREA expects average price of a home to end the year 4.8% lower than 2022, but says prices will rise by 4.7% in 2024. Average price of $670,389 this year and $702,214 next year. Foresees home sales falling 1.1% to 492,674 this year and then rising 13.9% to 561,090 in 2024.
– CREA: National home sales up 1.4% monthly in March. New listings down 5.8% with new supply now at a 20-year low. National average home price was $686,371 last month, a decrease of 13.7% from the same time last year but almost $75,000 higher than its January level.
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.