August 5th, 2025 Mortgage Industry Update
The Bank of Canada announced on July 30th that its overnight rate will hold at 2.75%. Marks third pause after 7 consecutive rate cuts. With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, BoC decided to hold. The prime rate remains 4.95%.
Additionally this week:
– Canada’s economy contracted for the second straight month in May, with gross domestic product declining 0.1%, according to new Statistics Canada data. The figure matched the agency’s advance estimate and followed a similar decline in April.
– TD Economics report: Average mortgage balances among households where the primary earner is under 35 years of age have fallen by $15,500 since their peak in the third quarter of 2022. The reduction stands at $11,000 compared to the first quarter of 2023.
– CREA: Average price of a single-family home in Ontario fell year-over-year from $944,400 in June of 2024 to $880,700 last month, about a 6.7 per cent dip. Condo prices in the province were down 8.6 per cent in the same period, from $581,400 in June 2024 to $531,300 last month.
– TD survey: 76% of newcomers to Canada fear making financial mistakes. 55% reported difficulty managing their finances since arriving in Canada. 38% reported little to no understanding of the Canadian banking system.
– Equifax Canada: Mortgage delinquencies rose to 0.22 per cent in Ontario for the first quarter of this year. That’s up from 0.15 per cent in the first quarter of 2024 and 0.09 per cent in the first quarter of 2023.
– CMHC: Home prices will decline approximately 2% this year, with steeper drops anticipated in Ontario and British Columbia. The Canadian average home price is projected to fall from $689,619 in 2024 to between $676,909 and $679,107 in 2025.
– Wahi’s 2025 Homebuying Pressure Point Survey: 54% of millennials and 41% of Gen Zers have felt compelled to own a home. Surpasses national average of 34%. Only 30% of Gen Xers and 13% of baby boomers – generations with higher homeownership rates – reported similar sentiments.
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.
