August 20th, 2024 Mortgage Industry Update
The Bank of Canada announced on July 24th that its overnight lending rate will be cut to 4.50% from 4.75%! Marks the second back to back rate cut! Recent data has increased confidence that inflation will continue to move towards the 2% target. The prime rate decreases to 6.70% across lenders.
Additionally this week:
– CREA: National home sales dipped 0.7% last month compared with June, with new listings jumping by 0.9% and prices inching marginally upwards. MLS Home Price Index up 0.2% over June, although it remained 3.9% below the same time last year.
– For 2024 and 2025 combined, a total of over $675 billion in mortgage loans will be renewed, according to Canada Mortgage and Housing Corporation, a figure equalling nearly 40% of Canada’s overall gross domestic product.
– Bank of Canada data shows that Canadian households have pulled back in spending. Household credit advanced just 3.4% (+$96.2 billion) to $2.95 trillion in May. The rate of change is now just 0.2 points above the rate reported in October, which was the lowest in over 30 years.
– Statistics Canada: The national jobless rate held steady at 6.4% in July – but overall employment inched downwards. The economy culled a net 2,800 jobs, with part-time job losses helping cancel out gains in full-time work. Rate is nearly 1% higher than the same time last year.
– Wahi’s July 2024 Market Pulse Report: Bidding competition among GTA homebuyers eased for the fourth straight month. Across 300 neighbourhoods only 14% were in overbidding territory, down from the 27% in June. 4% were selling at asking, while people underbid on 82% of properties.
– Just a couple of weeks ago CIBC and TD’s interest rate forecasts were predicting an additional 175 basis points worth of Bank of Canada rate cuts by the end of 2025. Both have updated those forecasts and are now predicting 200 bps worth of easing by the end of 2025.
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.
