November 12th, 2024 Mortgage Industry Update
The Bank of Canada announced on October 23rd that its overnight lending rate will be cut to 3.75% from 4.25%! A cut of 50 bps as compared to the previous 25 bps intervals. Marks fourth back to back rate cut! Inflation has dropped below the 2% target now. We can expect further decreases. The prime rate now decreases to 5.95%.
Additionally this week:
– Royal LePage president and CEO Phil Soper: Declining interest rates will kick off Toronto’s next housing market boom; one that will see the city take the crown from Vancouver as the country’s most expensive market in 2025.
– Urbanation: Rent prices in Canada’s major cities have dropped on annual basis for first time in three years. October saw annual 1.2% drop in national rental prices – not seen since July 2021. National average rent now $2,152/month, down $50 from record high of $2,202 in June.
– TRREB: 6,658 homes sold in October in the GTA, a 44.4% spike from the 4,611 sales recorded in 2023. New listings up by 4.3% yearly to 15,328. Average home prices showed a slight increase of 1.1% compared to last year, reaching $1,135,215.
– CMHC: Mortgage delinquency rates — the percentage of homeowners who have missed payments for over 90 days — rose slightly to 0.192% by the end of June, up from 0.17% at the end of 2023. Though still below pre-pandemic levels of 0.28% in 2019.
– Mortgage stress tests have proven to be effective in preventing an uptick in mortgage delinquencies despite recent interest rate hikes, according to a new Bank of Canada report. The 2018 changes, according to BoC researchers, enhanced credit quality across the mortgage portfolio.
– Statistics Canada: GDP remained unchanged in August and likely grew by 0.3% in September, a performance that would mean overall growth of 1% in Q3. Below the Bank of Canada’s 1.5% forecast for Q3 as well as economist estimates of 1.2%. Also a deceleration from 2.1% growth in Q2.
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.
