June 9th, 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:
– Zoocasa: There were a total of 532 new listings in Mississauga in April and 260 home sales; a steep 72% year-over-year decline. Average home prices in Mississauga grew faster than the regional average at 8% annually, ending April at $832,112.
– Toronto home sales jumped from low of -73% (from 2019) in mid-April to -40% (from 2019) in late May. New listings, once as low as -68% year-over-year in GTA in early May, have risen to end the month at -36%. Implies that buyers previously put off by COVID may now be reentering.
– Canada’s biggest banks have authorized customers to put off payments on more than $180B in mortgages and home equity lines of credit during 3 months ended April 30 because of the coronavirus pandemic. Total represents more than 14% of the $1.24 trillion in residential mortgages.
– Finder.com survey: 15 diligent economists suggest that the Bank of Canada overnight rate of 0.25% could be around for more than a year, maybe two. 50% of them see rates holding for more than a year until the end of 2021, while 26.67% believe until the first half of 2022.
– Statistics Canada: The economy shrank the most since the 2008-09 financial crisis, marking beginning of what’s expected to be the deepest contraction of the post-war era. GDP dropped at an annualized 8.2% in the first quarter of the year. Economists had anticipated a 10% decline.
– BILD: In April, 771 new homes were sold, down 80% from 2019 and 78% below 10 year average. Single family homes accounted for 301 of the sales, down 62% from 2019 and 79% below 10 year average. 470 condos sold and was down 85% from April 2019 and 78% below the 10 year average.
Stay tuned for the next update!
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