July 14th, 2020 Mortgage Industry Update
The Bank of Canada announced on June 3rd that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The possibility of further rate reductions remains unclear at this time as the economy deals with the COVID-19 pandemic.
Additionally this week:
– Household credit stood at $2.29 trillion in May, which was essentially flat from the month prior and 3.6% higher annually. The year-over-year pace was the slowest since June 2019, Better Dwelling reported.
– TRREB: Detached properties were up 14% in June from 2019 to $1.52 M and semi-detached properties led the way by rising an incredible 22% – up to an average of $1,287,832.
– A significant fraction of Canadian business tenants are expecting their revenues to bounce back to pre-pandemic levels within 12 months, according to a recent survey by the Bank of Canada.
– Statistics Canada: Household savings have reached a near-20-year high recently, potentially galvanizing future market activity. The savings rate nationwide went up to 6.1% in the first quarter, which was 69.44% larger than the Q4 2019 level and 165% higher on an annual basis.
– TRREB: Average price of GTA home hit $931k in June; new all-time high that surpassed previous April 2017 market peak of $921k. Total home sales (8,701) fell 1.4% in June from 2019, compared with 53.7% drop in May. Listings rose 2.1% year-over-year, versus a 53.1% decline in May.
– In May, Canadian mortgage credit reached a new record high of approximately $1.68 T, accompanying a spike in deferrals. Bank of Canada data showed that outstanding balance of mortgage debt grew by 0.6% from April and 6% from May 2019, highest annual increase since July 2017.
Stay tuned for the next update!
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