March 17th, 2020 Mortgage Industry Update

The Bank of Canada announced on March 4th that it’s overnight lending rate will decrease from 1.75% to 1.25%. The prime rate has decreased to 3.45%. The common prediction currently stands that the Bank of Canada will likely either keep rates consistent for 2020, or the possibility of another rate drop sometime in the near future. 

Additionally this week:
– Oil crashed (30%) the most in 29 years as Saudi Arabia and Russia vowed to pump more in a battle for market share just as the coronavirus spurs the first decline in demand since 2009. Futures slumped by about 25%. Brent trading at $36/barrel, West Texas Intermediate at about $33.

– 2019 CMHC Mortgage Consumer survey: 61% of first-time and repeat homebuyers in Canada were female. In the USA single women made up 17% of homebuyers in 2019, according to the National Association of Realtors, while single men accounted for about 9%.

– Ipsos: Just 2 in 10 Ontarians say they are considering making a home purchase sometime in the next year. 31% of millennials say they prefer downtown, 35% say they want suburbs, with 23% saying they’d like to buy a home in a small city or town, 11% opting for more rural areas.

– Canada’s prime rate fell to 3.45% today for the first time since July 2018. That will result in interest cost savings of about $500 a year per $100,000 of mortgage. Those with adjustable-rate mortgages will see their payments drop by about $24 per $100,000 of mortgage.

– TREB: The average sale price for a detached home in central Toronto was $1,184,800 in February, up 8.1% from a year earlier. Condo prices rose 11% to $609,200 on average downtown. Board’s current average forecast is for 10% price growth to $900,000 in 2020.

– TREB: Home sales surged 45.6% year-over-year across the Greater Toronto Area in February as 7,256 homes traded hands. Active listings plunged 33.6% year-over-year. The average selling price was up 16.7% to $910,290.

 
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.

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