Daily Mortgage Report – May 8 Unemployment Surprise: Unemployment is a key determinant of home prices. And while it may seem hard to put a record 2 million lost jobs (StatsCan’s estimate for April) in a positive light, when economists were predicting double that amount, it’s a relief. Canada’s unemployment rate surged to 13%, near the highest in modern data...
Daily Mortgage Report – May 7 A Record 4 million: That’s how many jobs disappeared in April, predict economists surveyed by Bloomberg. That’s a stunning one-fifth of the labour force, and only a portion of those jobs will return soon. How many of these families own homes? A meaningful minority. But the bigger question is, how many will continue paying...
The Daily Mortgage Report – May 4 Variable Advantage Fades: The lowest widely available 5-year fixed rates are now just 20 basis points more than the lowest variable rates. That differential has shrunk considerably in the last month or so, causing some would-be variable takers to give up and go fixed. RateSpy simulations confirm it would now only take two...
TD Canada Trust rate cuts: Special fixed rates drop from: 3yr: 2.99% to 2.89% 5yr (high ratio): 2.99% to 2.79% Posted rates drop from: 1yr fixed: 3.59% to 3.44% 2yr fixed: 3.74% to 3.54% 5yr variable: 2.65% to 2.35% (P – 0.25%) Every time a bank cuts 1- and 2-year posted rates, it raises the chances of customers paying bigger...
Tough Sledding: The mortgage industry will remain under pressure “over the near-term as employment trends weaken, credit loss provisioning moves higher, and housing / mortgage activity pulls back materially,” TD says. If government subsidies disappear in 2021, the bank projects 50% higher mortgage defaults industry-wide, peaking in first quarter 2021. But the overall arrears level will stay below the historical...
Today’s Rate Menu: After a three-week hiatus, variable mortgage rates are back down to prime – 0.50% (a 1.95% effective rate, including cash back) in some provinces—but only if you need a default-insured mortgage. The lowest widely advertised uninsured rates remain HSBC’s 2-year fixed at 2.34% and the fully open Tangerine HELOC at 2.35%. Sales Should Surge Post-Reopening: Home purchases...
RBC Cuts Again: The nation’s biggest mortgage lender dropped six “Special Rates” today: 1yr: 3.14% to 3.04% 2yr: 2.79% to 2.69% 3yr: 2.99% to 2.89% 4yr: 3.04% to 2.94% 5yr: 3.24% to 3.09% Variable: Prime + 0.25% to Prime +0.00% Quick take: Despite the fact that prime + 0% is nothing to write home about, any improvement in variable-rate pricing...
Cracks in Real Estate: Home sales have plunged. No secret there. But new data from HouseSigma gives us a hint of how much, at least in the Greater Toronto Area. Raw year-over-year sales data shows that during the first three weeks of April, GTA home sales have nosedived from 11,777 to just 4,027, down roughly 66%. And properties for sale...
Never before has our government been able to borrow 5-year money so cheaply. With oil in crisis mode, Canada’s benchmark 5-year bond closed at a record low yield of 0.419% on Thursday, according to Bloomberg. Bond yields remain a driving force for fixed rates, even with all the risk and volatility in the market. The reason: numerous other mortgage benchmarks...
Oil Bloodbath: Crude posted its largest price decline in history today, down 300% in the May futures contract. How is it possible to fall more than 100%? Oil futures traded below $0 a barrel for the first time in history. People weren’t even willing to take a barrel of oil (for May delivery) for free. The June contract was down...
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