April 1st, 2025 Mortgage Industry Update
The Bank of Canada announced on March 12th that its overnight rate will be cut from 2.75% to 3.00%! Marks the seventh consecutive rate cut from the bank. Heightened trade tensions will likely slow pace of economic activity and increase inflationary pressures in Canada. The prime rate decreases to 4.95%.
Additionally this week:
– TD Economics has revised its forecast sharply downward, now expecting a 3.2% decline in average home prices this year. Home prices in Canada now expected to fall in 2025, as lingering effects of trade uncertainty, affordability challenges, and weak buyer demand take their toll.
– Royal LePage: Median price of a single-family home in Canada’s recreational regions (cottage country primarily) is expected to rise 4.0% in 2025 to $652,808, up from $627,700 in 2024. Despite slowdown in activity, demand continues to outstrip supply in many parts of the country.
– Colliers Research and Altus Group: Land sales across seven major Canadian regions reached $2.29 billion in the last quarter of 2024—up 44% from the previous quarter, though still well below the $5.21 billion peak in Q2 2022.
– Figures from the Canada Mortgage and Housing Corporation show that 1.2 million mortgages are coming up for renewal this year. Notably, 85% of these were signed when the Bank of Canada’s overnight rate was at or below 1%.
– CityNews-Léger poll: As Canada heads into a federal election 26% of respondents identified Canada-US relations as their primary issue, 22% cited inflation, and 10% said the economy. US relations have become the top concern for voters—surpassing domestic issues for the first time.
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.
