February 11th, 2025 Mortgage Industry Update
The Bank of Canada announced on January 29th that its overnight rate to 3.00% from 3.25%! Marks the sixth consecutive rate cut from the bank. The economy is expected to strengthen gradually and inflation to stay close to target moving forward. The prime rate decreases to 5.20%.
Additionally this week:
– Statistics Canada: Employers added a net 76,000 jobs in January, posting a better-than-expected performance as the unemployment rate surprisingly dipped a percentage point to 6.6% even amidst growing economic uncertainty. Economists’ forecast was the addition of just 25,000 jobs.
– TRREB: 5,971 home sales in January, 10% higher than December. New listings up 26% monthly. Average home price remained stable at $1,089,300. Expects total sales in 2025 to be 12.4% higher than in 2024. Expects average selling price to reach $1,147,000, up 2.6% yearly.
– CMHC 2025 Housing Market Outlook: Expects housing activity to improve in 2025, driven by lower mortgage rates and pent-up demand from buyers who have been sidelined by high borrowing costs. However, affordability challenges and regional variations will lead to an uneven recovery.
– Office of the Superintendent of Bankruptcy: Insolvencies in Canada climbed by 12.1% annually in 2024, with business insolvencies leading the increase at 28.6%. The hardest-hit industries included construction, transportation and warehousing, and accommodation and food services.
– Canada’s real GDP fell 0.2% in November, the largest monthly decline since December 2023, according to Statistics Canada. This slight miss followed a 0.3% increase in October, with 13 of 20 sectors experiencing declines in November. However, December is poised for a rebound.
– Federal government delaying plans to increase taxes on capital gains until January 1, 2026. Hike was announced in last year’s federal budget. Government pushing back date of change to give Canadians more certainty as tax season loom.
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.
