October 17th, 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:
– Royal LePage forecasting aggregate price of home in Canada will increase 7% in Q4 2023 annually, downgrading previous outlook of 8.5%. Decrease reflects sluggish Q3 in which national aggregate home price rose 3.6% year over year to $802,900, but fell 0.8% on quarterly basis.
– The national mortgage delinquency rate was 0.15% in Q2 2023, flat from the previous quarter and a year prior. It’s 0.01 points higher than the record low, but still nearly half the 0.28% delinquency rate in Q1 2020.
– CMHC: Number of new single-detached houses under construction in the first half of 2023 was down 25% annually. 9,523 new single-detached units under construction in the country’s six largest CMAs. Construction of semi-detached (-22%) and row units (-17%) were also down yearly.
– NerdWallet Canada study: 23% of Canadian homeowners said that they will be selling their primary residences within the next three years. The study found that 73% will be updating the interiors of their homes, while 45% will be making repairs or renovations to their exteriors.
– TRREB: GTA saw home sales drop by 7.1% annually in September. Total of 4,642 homes changed hands in the city and its surroundings last month. Average home price in the region was just under $1.12 million in September, a 3.4% increase over August and 3% up over September 2022.
– CMHC study: Far larger amount of investment will be needed to achieve housing affordability in Canada. Housing stock needs to exceed 22 million housing units by 2030 to achieve affordability for all. Rough estimate suggests this amounts to an investment of at least $1 trillion.
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.
