BC Housing and Mortgage Insights Newsletter June 7, 2024
This week, our newsletter delves into crucial updates in the Canadian housing and mortgage markets. Explore the impacts of the Bank of Canada's recent rate cut, rising mortgage delinquencies, and current homebuyer trends. Stay informed and make smarter decisions with our in-depth articles and expert insights.
Subscribe to the BC Housing and Mortgage Insights Newsletter
Can a single rate cut make waves in Canada’s housing market? What to know
The Bank of Canada’s first interest rate cut in over four years will have a psychological impact on the housing market but likely won't significantly improve affordability. The 25 basis point cut brings the rate to 4.75%. While homeowners with variable-rate mortgages will see immediate relief, the cut is not expected to help many prospective buyers qualify for homes. Experts suggest the impact of this single rate cut will be marginal, offering some relief but not dramatically changing the affordability landscape.
Long awaited Bank of Canada rate cut gives Canadian homeowners some relief
Homeowners in Canada can finally breathe a sigh of relief. The central bank has cut interest rates for the first time in four years, providing much-needed relief for those with variable-rate mortgages. This move comes after a series of rate hikes since 2022 had put many mortgage holders under financial strain.
Bank of Canada reduces policy rate by 25 basis points
The Bank of Canada has lowered its target for the overnight rate to 4¾%, marking a significant shift in monetary policy. This decision comes as the global economy shows mixed signals of growth and inflation, with Canada experiencing slower-than-expected GDP growth. The reduction aims to ease underlying inflation pressures and support economic stability.
Understanding the behaviours and attitudes of today’s mortgage consumer
2024 Mortgage Consumer Survey highlights key trends in homeownership and mortgage practices. Homeownership remains a smart financial choice for 79% of consumers, with a notable 23% of recent mortgages used for rental properties. Down payments mostly come from personal savings, with 30% of buyers receiving family gifts, averaging $77,000. Mortgage professionals play a crucial role, with high satisfaction rates among their clients. Energy efficiency is increasingly important, with 57% of buyers prioritizing it and many investing over $13,000 in improvements, often using savings or credit facilities.
Canada sees slowest mortgage growth in over 20 years, with financial strain growing: CMHC
The Canada Mortgage and Housing Corporation (CMHC) reports that residential mortgage debt in Canada reached $2.16 trillion in February, a 3.4% increase from February 2023, marking the slowest growth in 23 years. Higher mortgage costs and economic uncertainty have slowed home sales and prices. However, CMHC anticipates that mortgage growth may rebound due to expected declines in mortgage rates and rising home sales. Financial strain is increasing, with mortgage delinquency rates rising to 0.17% in late 2023, highlighting growing household debt vulnerability. Policymakers and the financial sector are monitoring these risks closely.
