April 23rd, 2024 Mortgage Industry Update
The Bank of Canada announced on April 10th that its overnight lending rate will remain at 5.00%. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2½% in the second half, and reach the 2% inflation target in 2025. The prime rate remains at 7.20%.
Additionally this week:
– Royal LePage House Price Survey forecasts the aggregate price of a home in Canada will increase by 9% in 2024’s fourth quarter, compared to the same period last year. This figure increased 4.3% yearly to $812,100 in the first quarter of 2024, which was stronger than expected.
– Wahi: Compared to 25% in February and 35% from a year ago, 43% of GTA neighbourhoods were in overbidding territory in March. Additionally, 6% were selling at-asking, while 51% were underbid, marking a significant decrease from 69% over the same period.
– CIBC poll: 76% of Canadians who don’t own a property say entry to the housing market feels out of reach. 70% of non-owners cited overpriced markets as one of the main barriers to achieving their homeownership goal, while 63% cited the inability to save for a down payment.
– The Ford government has unveiled new Cutting Red Tape to Build More Housing Act. Includes reduction in amount of parking developers need to build, special rules to fast-track construction of student accommodation and a use-it-or-lose-it policy for developers “land banking”.
– The federal government announced it will allow 30-year amortization periods on insured mortgages for first-time homebuyers purchasing newly built homes.
– Bank of Canada: Total mortgage debt balance rose just 0.47% (+$8.46 billion) to $1.8 trillion in Q4 2023, about half the rate in the prior quarter. The rate was also the lowest growth of any quarter since 2019, and the slowest Q4 reported since 2008.
– MNP Consumer Debt Index: 27% of respondents feeling better about their debt than last year, an improvement of 5 percentage points. Meanwhile, the number of Canadians who think their debt situation has worsened dropped by 6 percentage points to 16%.
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.
