March 24th, 2020 Mortgage Industry Update

The Bank of Canada held an emergency rate announcement on March 13th and cut it’s overnight lending rate from 1.25% to 0.75%. The prime rate has decreased to 2.95%. The common prediction currently stands that the Bank of Canada will likely further reduce rates in the coming months to due the COVID-19 pandemic.

Additionally this week:
– Last month’s announced change to Canada’s insured mortgage stress test—which was to take effect April 6—has now been put on hold. The federal government had planned to change the formula for the benchmark qualifying rate.

– Canadians continue to see home ownership as an important element in their long-term financial plans, which is leading many to pay off their mortgages faster than the set amortization period, according to Mortgage Professionals Canada (MPC).

– Altus Group: There was $77 billion spent on home renovations by Canadians in 2018, down 5.15% from 2017. In 2019, they expect the year to finish with $78.5% billion, up 2.1% from 2018. Also expect 2020 to rise to $80.8 billion, up 3% from 2019.

– TRREB: February average price of a home in Mississauga hit $887,218; an incredible 13.4% ($104,803) increase from the $782,415 average just 30 days before. This was an 18.9% increase in the average sale price for all dwellings compared to $712,625 in February 2019.

– Statistics Canada: Value of residential building permits increased by 12.7% in January from December 2019 to $5.8B. Significantly, permits for multi-family dwellings were up 17.1% to $3.4B in January. The value of permits for single-family dwellings increased 7.0% to $2.4B.

– There were 30,000 extra jobs created in Canada last month, a modest 0.2% increase from the previous month. Year-over-year the increase was 245,000 or 1.3% according to new data from Statistics Canada with full-time jobs accounting for the majority.

 
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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