May 13th, 2025 Mortgage Industry Update
The Bank of Canada announced on April 16th that its overnight rate will hold at 2.75%. Marks the first pause after seven consecutive rate cuts. The major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty and diminished prospects for economic growth. The prime rate remains 4.95%.
Additionally this week:
– CPA Canada and BDO: 32% of Canadians say saving for down payment is main barrier for them entering the housing market. 30% highlighted mortgage payment costs as their main obstacle to owning a home. 10% indicated a preference toward the flexibility of renting compared to owning.
– TRREB: Home sales in the GTA down 23.3% in April to 5,601 compared with 7,302 in April 2024. 18,836 new properties listed for sale, up 8.1%. Average selling price decreased 4.1% to $1,107,463. Prices fell for third month in a row. Active listings hit 27,386 last month, up 54%.
– BMO report: 43% say they couldn’t have purchased their first home without financial help from family. The findings highlight a growing reliance on the so-called “Bank of Mom and Dad,” with 27% of Canadians expecting support from parents or grandparents.
– BMO Real Financial Progress Index: 67% of prospective homebuyers are delaying their purchase until interest rates decline – a slight dip from 2024. 66% of Millennials said they feel they have missed their opportunity to buy a home.
– Wahi: 84% of GTA neighbourhoods with at least five home sales were in underbidding territory last month, up from 73% in March. That’s an increase compared to the same point last year (57%), as well as in April 2023 (39%). Just 13% of neighbourhoods were in overbidding territory.
– Speaking at a press conference Mark Carney confirmed the federal government would impose new caps on the number of international students and temporary foreign workers entering Canada, part of a broader plan to ease pressure on the country’s strained housing supply.
– Urbanation: Rents in GTHA during Q1 declined 2.2% from a year ago. Average condo rents in GTA declined on an annual basis for the fourth consecutive quarter to $2,612. Condo rents are down 10% from a record high of $2,925 set in Q3 2023.
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.
