July 23rd, 2024 Mortgage Industry Update
The Bank of Canada announced on June 5th that its overnight lending rate will be cut to 4.75% from 5.00%! Officially the first rate cut in over 4 years! Recent data has increased confidence that inflation will continue to move towards the 2% target. The prime rate decreases to 6.95% across lenders.
Additionally this week:
– Angus Reid: 94% of Canadian homeowners plan to remain in their current homes for at least the next year. Nearly a quarter of them note the higher costs of living as their reasoning. Also found that 25% of those who won’t move plan to renovate their homes within the next year.
– CREA now anticipates gradual rebound in national housing market with 472,395 properties forecast to trade hands this year – 6.1% increase from 2023, but down from April forecast of 10.5%. Now predicting 2.5% annual increase in average price to $694,393 down from forecast of 4.9%.
– CREA: National home sales increased by 3.7% between May and June, with activity still well below the same time last year (falling by 9.4%). Home prices also slipped marginally, with national average – $696,179 – coming in 0.4% lower than May and 1.6% below June 2023.
– Earlier Royal LePage survey: 51% of potential buyers who had paused their search said they would resume if interest rates were reduced. 10% indicated that 0.25% drop would be enough to bring them back into the market. 18% are waiting for a cut of 0.50-1.00%. 23% waiting for 1%+
– Rentals.ca: June average rent price ($2,185) in Canada rose 7% yearly, marking slowest growth rate in 13 months. Down $17 from May. This 0.8% monthly decline is largest decrease since early 2021. Still up by more than $530, or 32%, since hitting low of $1,662 in April 2021.
– High housing costs are causing nearly two in five recent immigrants in Canada to consider relocating either to another province or out of the country altogether, according to new data from the non-profit Angus Reid Institute.
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.
