February 3rd, 2026 Mortgage Industry Update
The Bank of Canada announced on January 28th that its overnight rate will remain at 2.25%. After a strong Q3, GDP growth in Q4 likely stalled. Economic growth is projected to be modest in near term. Expects inflation to stay close to 2% target over the projection period. The prime rate remains at 4.45%.
Additionally this week:
– Between 2011-2021, ownership rate for 30–34-year-olds fell from 60% to 52%. While 86% of non-homeowners under 30 and 75% of non-homeowners between 30-44 still aspire to own a home one day, only 51% and 47%, respectively, are very or somewhat confident they will achieve this goal.
– BILD: There were just 240 new home sales in December, 24% below December 2024 and 82% under the 10‑year average. That brought total 2025 sales to 5,314 units – a fraction of the roughly 28,000 annual deals seen over the past decade. Worst year for new home sales in 45 years.
– Canadian Bankers Association: Canada’s mortgage arrears rate edged higher again in October, rising to 0.25% of all residential mortgages, the highest level since 2020. However, remains low overall. A total of 12,236 mortgages were in arrears by 90 days or more at month-end.
– PwC Canada: Only 27% of Canadian CEOs expect the domestic economy to improve over the next 12 months, down from 42% a year earlier, and just 47% sees brighter prospects for global growth, compared with 61% of CEOs worldwide.
– Urbanation: New condo sales in GTHA sank in 2025 to lowest level since 1991. Just 1,599 new condo sales, 60% drop from 2024 and 95% below 2021. Total of 28 active projects (7,243 units) were scrapped. Average selling price slipped to $1,123/sqft – down 8% from 2024, 18% from 2022.
– Wahi: Home prices declined among all property types in Canada at the end of 2025. For the first time since mid-2023, home prices were down on an annual basis for detached, semi-detached, and row and townhouses as well as condo apartments. Index declined 1% annually last month.
– BMO Capital Markets warns inflation-adjusted home prices have rolled back almost a decade. Price of typical home fell 21% from record high in 2022, but much of 2020’s low-rate-fueled surge remains. Since initial correction’s shock, prices have been resistant to further declines.
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.
