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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:

– In Q3 2024 housing affordability saw modest gains. Mortgage payment as a percentage of income (MPPI) for the median-priced Canadian home, valued at $795,540, dropped to 56.6%. This marked a 1.3% improvement from Q2 and a 3.4% drop annually.

– CMHC: Housing starts trended at 240,761 units last month, up by 8% over September. Urban housing starts saw a 6% jump to a pace of 223,111 units, with multi-unit urban starts posting a 7% increase to 175,705 and single-detached urban starts rising by 1% to 47,406 units.

– Statistics Canada: National inflation rate jumped back up to 2% in October from 1.6% in September. Figure coming in slightly higher than the 1.9% expected by economists polled in a Bloomberg survey. Mortgage interest and rent costs remain two of the most prominent contributors.

– Statistics Canada: GDP in the past three years have been revised up by a cumulative 1.3 percentage points, showing significant upward swing. Revised GDP growth for 2023 is 1.5%, up from 1.2%; for 2022, it’s 4.2%, up from 3.8%; and for 2021, it’s 6.0%, up from 5.3%.

– In 2024, rental housing construction reached new heights, with purpose-built rentals making up a record-high 47% of all housing starts in the country’s six largest Census Metropolitan Areas.

– CREA: 7.7% increase in sales from September brought October sales to levels not seen since April 2022. Up 30% annually though. However, the benchmark price dipped 0.1% to $716,800. New listings down 3.5% monthly to 174,458, but up 11.4% annually.

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.