September 2022 Mortgage & Market Report

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Each Executive Summary Report is for a specific TRREB zone combination and includes a map of the included zones and a 4 page summary for each property type (detached, semi-detached, townhomes, condos)
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The Information / statistics you can find in each Executive Summary Report include:

• Data comparing the – 1, 3, 5 and 10 year sales averages.

• Stats categories – Sales, New Listings, Active Listings, Average Price, Months of Inventory (MOI), Sales to New Listing Ratio (SNLR)

Mortgage Rates & Trends

Outline Financial Rate Grid – October 20, 2022

Variable Rate forecast – as variable rates are linked to a lenders’/banks’ prime lending rate, any interest rate movement by the Bank of Canada (BofC) typically results in an immediate change to variable rates.

While inflation slowed slightly in September (6.9% vs. 7.0% in August), it came in higher than expected setting the stage for further increases by the Bank of Canada when they meet on October 26th. A summary of the meeting dates and our expectations are as follows:

Jan 26, 2022 (no increase)
Mar 2, 2022 (actual: +0.25% increase)
Apr 13, 2022 (actual: +0.50% increase)
Jun 1, 2022 (actual: +0.50% increase)
Jul 13, 2022 (actual: +1.00% increase)
Sep 7, 2022 (actual: +0.75% increase)
Oct 26, 2022 (anticipated: +0.50% or 0.75% increase)
Dec 7, 2022 (anticipated: +0.00% or 0.25% increase)

As of the time of writing, the Big 6 Banks are generally forecasting the Bank of Canada to increase an additional 0.75% to 1.00% during 2022, remain relatively flat during 2023, and then decline back to current rates during 2024. For reference, the current Bank of Canada overnight rate is 3.25% with lenders’/banks’ prime lending rate at 5.45%. We will continue to monitor these forecasts and update the information when applicable.

Fixed Rate Forecast – 5-year fixed rates typically follow the Government of Canada’s 5-year Bond Yields which is the market’s view/prediction of where interest rates will be in the future.

5-year bond yields began their ascent in late 2021 and early 2022 in anticipation of the Bank of Canada rate increases that started in March 2022. Yields moved from the 1.5% range in January to a peak of 3.5% in mid-June with 5-year fixed rates increasing accordingly. Yields then settled in the 2.8% to 3.4% range from July through September.

While the economy is cooling, recent job and inflation reports signal things are not cooling as quickly as anticipated. In response, yields have tested new highs reaching 3.7% as at the time of writing, the highest point since 2007. All eyes will be on the Bank of Canada on October 26th when they present their Monetary Policy Report (economic projections) and announce any change to their overnight interest rate.

Timely News Articles & Video Links:

Canada’s inflation falls to 6.9% in September as grocery prices continue to rise

Video: Recession risks are rising: We explain why

Video: Which Central Bank Will Succeed in Cooling Inflation?

Canada’s unemployment rate drops to 5.2%: What you need to know

Downloads & Guides

Click the image to download the document.

Click the image to download the document.

Bank of Canada Increases…Again – What Does This Mean for You?

On September 7th, the Bank of Canada increased its overnight rate by 0.75% (75 bp) to 3.25%.  This increase was in line with most economists expectations, and builds on the 1.00% (100 bp) rate hike from July.  Lenders increased their Prime Lending Rates accordingly which moved from 4.70% to 5.45% (TD Mortgage Prime moves from 4.85% to 5.60%).

Our team prepared the below info bulletin that discusses why the Bank of Canada increased, what’s next, and how this increase impacts current mortgage holders and those looking to get in the market.

Click the image below to download the document.

Market Report Downloads

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