August 18th, 2020 Mortgage Industry Update
The Bank of Canada announced on July 15th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada has openly stated that it will more than likely keep rates at this “effective lower bound” for the immediate future until the effects of the pandemic are more clear.
Additionally this week:
– While GTA averaged 10-15 new condo launches per month in recent springs, was down to 3 during the height of COVID-19 this year. After strong start to 2020, year-to-date sales now 32% below 2019 levels due to dropoffs in April, May. However, new condo prices still up by 12%.
– CMHC: Builders started work on an annualized 245,604 units in July, up 16% from 212,095 a month earlier. That’s the most since November 2017, and significantly higher than the 205,000 median forecast in a Bloomberg survey of economists.
– Canadian homeowners shelled out $80.1 billion on home renovations in 2019, according to a new report from Altus Group. The real estate data firm said overall spending was up 2.6 per cent in the year, outpacing overall economic growth.
– The stress test rate is about to fall for the second time in three months following cuts by Canada’s Big Six banks to their 5-year fixed posted rates. Mortgage experts say the Bank of Canada will reduce the benchmark qualifying rate from 4.94% to 4.79% this week.
– Equifax: Nationally In Q1, the share of mortgage payments that were 90 or more days overdue was 0.29% – essentially unchanged from Q4 2019 while declining by 3.3% annually.
– TRREB: 2,339 homes sold in Peel Region in July, up 29% from 2019, and up 32% month-over-month. New listings grew 23% from 2019, with 3,553 homes hitting the market in July. The average home price in Peel rose by 18% to $902,257.
Stay tuned for the next update!
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