June 25th, 2019 Mortgage Industry Update
The Bank of Canada announced on May 29th that it’s overnight lending rate will remain at 1.75%. The prime rate remains 3.95%. The common prediction currently stands that the Bank of Canada will likely keep rates consistent for the remainder of 2019.
Additionally this week:
– Federal Government unveils new mortgage incentive details: For existing homes, incentive will be 5% while for new homes there will be a 5% or 10% option; aims to increase new supply. Interest free loan, however CMHC would get to participate in the profits or losses of the home.
– Statistics Canada: Unemployment rate reached a record 5.6% in May, the lowest reading since 1976. During the same month, the national workforce had 27,700 new additions, bringing the 12-month total increase to 453,100. Represented 2.4% year-over-year increase.
– CREA: National home sales up 1.9% annually in May to 39,351 on seasonally adjusted basis, most since January 2018. Third straight reported increase in transactions, after brutal February; returning sales to 10-year average levels for the month.
– Generation Squeeze study: It now takes a Millennial (25-34) 13 years to save a 20% down payment on an average priced home in Canada, compared to the 5 years it took when today’s ageing population started out as young adults around 1976. Average earnings remain relatively flat.
– TREB: Benchmark price for a typical detached home reached $939,300 in May, up 0.83% from last year. The City of Toronto benchmark reached $1,113,600, up 1.09% from last year. Across Greater Toronto, prices are still down 10.48% from the peak reached two years ago.
– Equifax: “Considerable slowing” over past year with value of new mortgage in Q1 2019 down 12% year-over-year. Market has reduced for six consecutive quarters. Average new mortgage in Q1 2019 was $268,480, down 3.2% from 2018. Total mortgages outstanding rose 4% to $1.278 trillion
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.Share this post on: Connect with us on: