August 15th, 2023 Mortgage Industry Update
The Bank of Canada announced on July 12th that its overnight lending rate will increase to 5.00%. The Canadian economy has been stronger than originally expected, with more momentum in demand. CPI inflation is forecast to hover around 3% for the next year before gradually declining to 2% in the middle of 2025. The prime rate increases to 7.20%.
Additionally this week:
– Royal LePage report: In 2023, the aggregate price of single-family homes in Canada’s recreational regions is predicted to decline by 4.5% to $592,005, as market activity lessens.
– TRREB: Average sale price for all dwelling types in Brampton fell 28.2% to $981,920 in December from a record high of $1,367,444 in January 2022. Mississauga price fell to a $920,587 in January 2023 from a record high of $1,225,339 in February 2022 — a 24.9% decline.
– NAR: Of the $53.3 billion USD worth of U.S. residential real estate purchased by foreign buyers between April 2022 and March 2023, $6.6B can be attributed to Canadian buyers. Canada is ranked as the second top foreign buyer. China is first with a dollar volume of $13.6 billion.
– Zoocasa researched home affordability in 17 major Canadian real estate markets and found that people earning the median income could not afford a home at the average price tag in 10 of those markets. Saint John, N.B., stood out as a city with the greatest home affordability.
– Statistics Canada: Unemployment rate inched slightly upwards in July, rising to 5.5%. Average hourly wages increased by a further 5% last month after rising in May and June, while the economy shed 6,400 jobs. This is the third month in a row that the labour market has slowed.
– TRREB: July sales tumbled by 8.8%, with the average selling price inching 0.7% lower as higher interest rates continued to bite. 5,250 sales recorded marked a 7.8% yearly increase, with listings jumping by 11.5% and the average selling price of $1,118,374 up 4.2% over July 2022.
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.