September 23rd, 2025 Mortgage Industry Update
The Bank of Canada announced on September 17th that its overnight rate will lower to 2.50% from 2.75%. Marks first rate cut since March. The cut is mainly due to declining GDP and rising unemployment rates nationally. The Bank continues to monitor the tariff situation with the US. The prime rate is now 4.70%.
Additionally this week:
– Canadian interest in US real estate has dropped sharply this year, with searches on Redfin down 19.5% in August compared with 2024, according to a new report from the real estate brokerage. Decline began in February after the White House imposed 25% tariffs on Canadian imports.
– Statistics Canada: Canadian municipalities issued $11.9 billion worth of building permits in July, virtually unchanged from June (-0.1%). Non-residential permits fell $279.2 million to $4.6 billion. Residential permits, meanwhile, rose $268.3 million to $7.3 billion.
– CREA: 40,257 home sales across nation in August – most for August in 4 years. Up 1.9% annually, 1.1% monthly. Marks fifth straight monthly increase. New listings up 2.6% monthly. Total of 195,453 properties listed for sale, up 8.8% annually. Average sale price $664,078 – up 1.8%.
– RBC’s latest analysis based on Statistics Canada data: Despite the softer housing market, Canadian household net worth still rose by 1.5% to $17.9 trillion in Q2, driven by a surge in financial assets that tracked a 7.8% rise in the S&P/TSX Composite.
– Equifax Canada survey: 56% of mortgage holders would consider refinancing with a different lender when their mortgage comes up for renewal. Those under 35, 57% indicated they would switch financial institutions if it meant better tools for building and monitoring credit.
– Renewals have become the main driver of mortgage activity through the second quarter of 2025. Equifax data show renewals and refinancings surged 27% year-over-year, with new mortgage originations up 15.3% largely on the back of this renewal wave.
– CMHC report: In Toronto, construction of new condominiums dropped by 60 per cent in the first half of 2025, and the agency predicts that for at least two more years, housing starts in the country’s largest city will be well below what’s needed to restore affordability.
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.
