August 27th, 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:
– Wahi study looked at median price differences between one-bed condos with and without parking across Toronto. Findings were clear — units with parking not only sold faster but also demanded significantly higher prices (this varied by location, but as much as $100,000 or more).
– Statistics Canada: New home prices in Canada were up 0.2% last month, with 10/27 census metropolitan areas seeing prices climb. New Housing Price Index for July showed that prices remained unchanged in 13 CMAs and fell in remaining four. Index increased by 0.1% yearly in July.
– Canadian Bankers Association: As of May 2024, around 9,500 residential mortgages were in arrears, with payments overdue by three or more months. Number represents less than 1% (0.19%) of over 5M total mortgages in Canada, reflecting slight increase from historic lows of 2022.
– Statistics Canada: National annual inflation rate fell to 2.5% in July, its slowest pace for over three years. Headline rate cooled for a seventh successive month, matching the expectations of economists surveyed by Bloomberg, and hit its lowest level since March 2021.
– Construction was started on an annualized 279,509 units in July, according to data released Friday by the Canada Mortgage and Housing Corp. That’s the highest level since June 2023, and exceeded the 245,000 units expected by economists. Starts rose 15.7% from the previous month.
– RE/MAX survey of 83 communities across GTA, GVA, Fraser Valley revealed that 30% of markets reported a rise in detached home sales during the first half of 2024, while nearly 40% saw an increase in home values. GTA saw a 34% increase of neighbourhoods in Toronto (416 area).
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.
