October 3rd, 2023 Mortgage Industry Update
The Bank of Canada announced on September 6th that its overnight lending rate will remain at 5.00%. The Canadian economy has now entered a period of weaker growth. CPI inflation is forecast to hover around 3% for the next year before gradually declining to 2% in the middle of 2025. Prime remains at 7.20%.
Additionally this week:
– A recent survey from Mortgage Professionals Canada found that as of this summer, 48 per cent of Canadians who don’t own a home do not believe they ever will. That figure has risen 15 per cent from six months ago, and is up from 33 per cent a year earlier.
– Equifax Fraud Trends Report: Over past year fraudulent applications have spiked by 28% in automotive sector, 37.9% in the credit card sector, and 18.8% in the mortgage sector, with identity fraud comprising 68.5% of all fraudulent applications in these segments during Q2 2023.
– BILD: 711 new home sales in August, up 52% annually. Still well below 10-year average of 1,922 new sales (down 63%). New condo apartments down 8.5% over the last 12 months, selling at $1.08 million in August. And new single-family home prices dropped 7.3% to $1.7 million.
– Delays and inefficiencies within the City of Toronto’s Committee of Adjustment process add anywhere from $21,000 to $58,000 annually to the cost of building projects, according to a study conducted by Altus Group Economic Consulting for BILD.
– Oxford Economics is forecasting a mild recession by the end of the year. Will lead to an additional 10% decline in average house prices by early next year. That would lead to a total peak-to-trough decline in prices since February 2022 of between 20-25%.
– Statistics Canada: Consumer price index rose 4% in August from a year ago, the quickest pace since April, following a 3.3% increase in July. Faster than median estimate of 3.8% in a Bloomberg survey of economists. On a monthly basis, the index rose 0.4%, double the expectations.
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.
