August 19th, 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:
– BMO Financial Group: 70% of Gen Z and 69% of Millennials want children but fear starting a family could undermine their financial security. 81% of Canadians say parenting brings joy and fulfilment, 53% of parents report that having children compromised their financial stability.
– TD Bank Group: 59% of newcomers who arrived in Canada within last five years say better access to credit would improve their living experience and quality of life, while 79% say it is challenging to build a credit history in Canada.
– REMAX Canada: 51% of Canadians said neighbouring homes in poor condition would be a deal breaker in the home-buying process, with 18% ranking it as their top deal breaker. Lack of curb appeal followed closely, with 41% saying it would prompt them to walk away from a property.
– RBC now projects national home resales will decline 3.5% to 467,100 units this year, with a 4.1% pullback in the first six months. The bank expects sales to rebound 7.9% to 504,100 units in 2026, though still below the pre-pandemic five-year average of 511,000.
– Financial markets expect the Bank of Canada to lower its policy interest rate to 2.25% by the end of 2025 and hold it there through 2026, according to the central bank’s second-quarter Market Participants Survey.
– RBC analysis: Rents are now falling in more than half of Canada’s 40 Census Metropolitan Areas compared to a year ago. Vancouver leading with two beds down $270 yearly in Q1. Calgary down $170, Toronto falling $160, and Halifax decreasing $150 for two-bedroom units.
– Road trips to the US decreased for a seventh straight month as Canadians ramped up their American boycott. Canadian-resident return trips by automobile from the neighboring US slumped 36.9% in July from a year ago, Statistics Canada data shows. Return trips by air also slid 25.8%.
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.
