January 23rd, 2024 Mortgage Industry Update
The Bank of Canada announced on December 6th that its overnight lending rate will remain at 5.00%. The Canadian economy has now entered a period of weaker growth and is continuing to slow. Recent data suggesting economy is no longer in excess demand. The prime rate remains at 7.20%.
Additionally this week:
– Bank of Montreal, Royal Bank of Canada, and Scotiabank all believe the Bank of Canada’s trendsetting rate will have fallen to 4.0% by the end of Q4, while Canadian Imperial Bank of Commerce forecasts a 3.50% rate by then and National Bank sees it sitting at 3.25%.
– CREA: Average prices for single-family homes in Ontario were up 0.9% annually in December. Prices for condos were down by 0.7%, and townhouses were up by 1.4%.
– Urbanation: Average asking rent for all residential property types in Canada grew by 8.6% annually in December to reach new record-high of $2,178. This built up on a 12.1% yearly upswing in 2022 and 4.6% rise in 2021. Over past two years asking rents have increased by 22%.
– Statistics Canada: Annual inflation rate rose in December. Consumer price index jumped by 3.4% last month compared with the same time in 2022, and accelerating from 3.1% in November.
– CREA: Home sales across country rose unexpectedly by 8.7% last month. Number of newly listed properties fell by 5.1% monthly. Still annual home sales came in significantly lower than in 2022, plunging by 11.1% to 443,511. Technically lowest annual national sales level since 2008.
– Bond markets are currently pricing in a 74% chance of a quarter-point rate cut at the Bank of Canada’s March meeting, and a 30% chance of an additional 50 bps in June. By September, markets see a 64% chance of 100-bps worth of cuts to the current benchmark rate of 5.00%.
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.
