November 21st, 2023 Mortgage Industry Update
The Bank of Canada announced on October 25th that its overnight lending rate will remain at 5.00%. There is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures. Supply and demand in the economy are now approaching balance. Prime remains at 7.20%.
Additionally this week:
– CMHC: Residential mortgage debt in Canada totalled $2.14T as of August this year, up 3.4% annually. Value of uninsured mortgages issued by non-bank lenders up by 9% year over year, while 73% of outstanding residential mortgages issued by chartered banks were uninsured in Q2 2023.
– Abacus survey: Overwhelming majority of Canadians have identified rising rent costs (91%) and overall affordability challenges (90%) as among the most significant issues facing the country today. Majority of respondents (59%) in both cases say issues are “a very serious problem”.
– As government faces mounting pressure to address housing crisis, it announced it will allow 2,800 homes to be built on six of its surplus properties across Canada via Crown Corporation Canada Lands Co. Back on track to develop about 29,200 housing units on federal lands by 2029.
– Bank of Canada’s Q3 Market Participants Survey: Many expecting Bank of Canada’s first 0.25% rate cut by April 2024. Expecting Bank to cut rates by 1% in 2024, bringing overnight target rate back down to 4.00%. See rates falling another 0.50% by Q1 2025. And down to 3.00% by Q3.
– Office of the Superintendent of Bankruptcy: Consumer insolvency filings in Canada posted a 2.4% decline in Q3 after reaching a 4 year high in Q2. Average of 331 Canadians filing every day in Q3, for a total of 30,471 filings. Annually consumer insolvencies increased by 17.8%.
– Statistics Canada: National unemployment rate ticked higher in October, rising to 5.7%. Labour market added 18,000 jobs last month. Unemployment rate has now increased four times in the past six months, with last month’s rate up from 5.5% in September.
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.
