June 10th, 2025 Mortgage Industry Update
The Bank of Canada announced on June 4th that its overnight rate will hold at 2.75%. Marks second pause after 7 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:
– Statistics Canada reported that exports fell 10.8% monthly in April — biggest monthly drop since the early days of the pandemic. The pullback was broad-based, with declines in 10 of 11 categories, and was felt most sharply in auto exports, which dropped nearly 23%.
– TD Bank Group survey: 45% of those set to renew within the next year expect their monthly mortgage payments to increase. 57% of survey respondents saying their renewal could affect their living situation. Among those, 73% are preparing to reduce discretionary spending.
– The Organization for Economic Co-operation and Development has downgraded its global Gross Domestic Product forecast to 2.9% for both 2025 and 2026, a decline from 3.3% in 2024. Canada’s growth is forecast at 1% in 2025 and 1.1% in 2026, down from 1.5% this year.
– TRREB: Benchmark price of a home climbed 0.1% in May from April, reaching $992,800. Sales were up 8.4% monthly, outpacing the 3.2% gain in new listings. Transactions were down 13% annually. Total number of houses on the market in Toronto was 42% higher.
– TRREB: Average condo price in Toronto has declined by approximately 7.6% yearly, hovering around $710,000. Inventory levels have surged by 28%, and months-of-inventory for condos has reached 6.5, solid indicators of a buyer’s market. Sales activity has dropped by 30% yearly.
– Statistics Canada: National economy grew at a faster rate than expected in the first quarter, expanding by 2.2% in news that’s likely to keep the Bank of Canada in wait-and-see mode as it weighs up interest rate cuts. GDP exceeded the 1.7% growth anticipated by economists.
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.
