October 1st, 2024 Mortgage Industry Update
The Bank of Canada announced on September 4th that its overnight lending rate will be cut to 4.25% from 4.50%! This marks the third back to back rate cut! Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and other services are holding inflation up. The prime rate now decreases to 6.45%.
Additionally this week:
– Re/Max report says national renovation spending increased by an estimated $300 billion between 2019 and 2023, led by home renewal and revitalization projects in the Toronto and Vancouver markets. That marked an eight per cent jump from the previous five-year period.
– Statistics Canada: New house price index was unchanged from July in August, which had seen modest increase of 0.2%. On yearly basis, new-house prices showed no change. Prices were unchanged in 13/27 metropolitan areas surveyed. Prices increased in 8 regions and declined in rest.
– 2024 Royal LePage Carriage Trade Luxury Market Report notes that luxury home sales were up in the first eight months of 2024 compared to the same period last year, except in Vancouver, Toronto and Halifax. Prices rose slightly in some regions and dropped slightly in others.
– CREA: On a yearly basis, the average single-family home in Ontario sold for $955,000 in August, down 5.2% from the average of $1,013,400 they sold for in August 2023. On a province-wide basis, prices for condos in a year-over-year comparison fell 7.5%, and townhouses fell 5.6%.
– Statistics Canada: National inflation rate landed squarely on the central bank’s 2% target in August, the slowest pace of annual growth for over three years. Figures were lower than analysts had expected. A poll conducted by Reuters revealed expectations of a 2.1% CPI reading.
– Statistics Canada: Q2 household credit market borrowing slowed slightly to $25.1 billion. Largely driven by a decline in consumer credit lending, which fell from $7.8 billion in Q1 to $4.0 billion. Mortgage borrowing up slightly to $18.3 billion, up from the $17.3 billion in Q1.
– CREA: August saw homebuying activity accelerate by 1.3% over July. MLS Home Price Index remained stagnant on monthly basis and dropped by 3.9% yearly. New listings were up 1.1% monthly. A total of 177,450 properties were on the market, significantly higher (18.8%) than 2023.
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.
