March 4th, 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:
– Nanos Research: 65% of Canadians expect economy to weaken over next six months. Highest percentage of people with negative economic outlook since June 2020. Just 9% believe economy will strengthen over next six months. President Trump’s tariffs are rattling consumer confidence.
– Equifax Canada quarterly credit report: Mortgage delinquencies in Ontario have skyrocketed 50% higher than pre-pandemic levels, and more than 11,000 mortgages in the province missed at least one payment in the fourth quarter of 2024, nearly three times the number seen in 2022.
– Statistics Canada: December retail sales jumped 2.5% to $69.6B, marking strongest monthly gain since mid-2022. Analysts widely attribute December’s retail strength to the GST/HST holiday, which began on December 15, prompting many consumers to postpone purchases until mid-month.
– Teranet: Median age of first-time buyer was 36 years old in 2014. By 2019, median age of the first-time buyer was 38 years old, and by 2024, that age is now 40. So, in the span of 10 years, first-time buyers are four years later getting into the housing market in Ontario.
– Altus Group: Greater Toronto developers wrapped up the year with the worst sales in decades. Just 9,816 new homes sold in 2024, down 47.3% from the previous year and 69% below the 10-year average. Sales haven’t been this weak since 1990.
– Canada’s housing market is bracing for a slowdown in new home construction over the next three years as economic uncertainty, declining investor interest, and shifting demand reshape the industry, according to the latest forecast from Canada Mortgage and Housing Corporation.
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.
