{"id":6521,"date":"2024-10-24T10:19:04","date_gmt":"2024-10-24T10:19:04","guid":{"rendered":"https:\/\/finderica.com\/mortgage-digest-prospective-homebuyers-waiting-for-sub-3-boc-rate-before-acting-survey-shows\/"},"modified":"2024-10-24T10:19:04","modified_gmt":"2024-10-24T10:19:04","slug":"mortgage-digest-prospective-homebuyers-waiting-for-sub-3-boc-rate-before-acting-survey-shows","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6521","title":{"rendered":"Mortgage Digest: Prospective homebuyers waiting for sub-3% BoC rate before acting, survey shows"},"content":{"rendered":"
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While mortgage rates have fallen substantially over the past year, they\u2019re still not low enough to entice a majority of prospective homebuyers into the market, according to a new survey<\/a> by EveryRate. <\/p>\n

The survey found that nearly three-quarters (74%) of Canadians considering a home purchase or refinance would act only if the Bank of Canada\u2019s policy rate, currently at 4.25%, were to drop below 3%.<\/p>\n

Another 12% said they\u2019d move when the rate drops below 4.00%, which could potentially happen as early as tomorrow, while only 3% are ready to act regardless of the current rates.<\/p>\n

\u201cWe knew Canadians wanted lower rates, we knew Canadians wanted into the housing market, we just didn\u2019t know how low they needed rates to go before they get off of the sidelines,\u201d Andy Hill, mortgage broker and co-founder of EveryRate.ca, said in a statement. <\/p>\n

\u201cMost Canadians are clearly waiting for rates to drop further before moving,\u201d he added. However, with current rate trends not expecting most fixed rates below 3.00% until at least mid-2025, Hill says that means many potential buyers and refinancers \u201cwill likely stay on the sidelines for the foreseeable future.\u201d<\/p>\n

A Bank of Canada policy rate at 3.00%, which impacts the prime lending rate used at most lenders, would imply variable rates about 125 basis points lower than today\u2019s levels.<\/p>\n

Currently, variable mortgage rates offered by national discount brokerages hover around 5.40% for uninsured mortgages and 5.20% for default-insured ones (those with down payments below 20%), according to mortgage analysis website MortgageLogic.news<\/a>. <\/p>\n

Fixed rates, influenced by Government of Canada bond yields, have also fallen over the past year.<\/p>\n

In recent weeks, a handful of discount brokerages started offering 5-year fixed rates just below 4.00%. However, these were specifically for high-ratio default-insured mortgages, meaning those with a down payment of less than 20%. <\/p>\n

However, sub-4.00% rates, briefly available earlier this year, have disappeared due to a recent spike in bond yields. The national average for high-ratio 5-year fixed mortgages now stands at around 4.50%, according to MortgageLogic.<\/p>\n

Last week, Ron Butler of Butler Mortgage told Canadian Mortgage Trends<\/em> that the recent spike in mortgage rates is likely to be temporary as bond yields stabilize and resume their downward trajectory.<\/p>\n

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Canadian household debt growth stalled in August<\/h2>\n

Canadian household debt grew by $7.7 billion, or 0.3%, in August, bringing total credit liabilities to $2.98 trillion, according to data<\/a> released last week by Statistics Canada. This matches the growth rate seen in July. <\/p>\n

The rise was largely driven by real estate-secured debt, which includes both mortgages and home equity lines of credit (HELOCs). Mortgage debt specifically saw a $6.9-billion increase in August, marking a 3.8% year-over-year growth, slightly up from July\u2019s 3.3% increase.<\/p>\n

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Active real estate listing cancellations up: National Bank<\/h2>\n

Last week, the Canadian Real Estate Association released September market data<\/a> showing that new listings were up 4.9% month-over-month, the eighth increase in nine months and the largest increase since July 2023. As a result, they are now at their highest level since February 2022.<\/p>\n

However, a report from National Bank noted that this didn\u2019t translate to an increase in housing inventory due to a rise in active listing cancellations. <\/p>\n

\u201c\u2026a higher proportion of sellers cancelled their listings during the month, probably because they (like buyers) are looking forward to future rate cuts and more momentum in the market,\u201d the report noted. <\/p>\n

Overall, active listings dipped by 0.5% in September, marking the second decrease in three months. The months of inventory, which measures the ratio of active listings to sales, also dropped slightly from 4.2 to 4.1, returning to levels seen before the pandemic.<\/p>\n

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Realtors\u00ae unveils advocacy priorities to address housing crisis<\/strong><\/h2>\n

REALTORS\u00ae, which represents more than 160,000 members across the country, are currently meeting with local Members of Parliament in Ottawa to advocate for \u201ccritical housing policies that encourage access to housing for all Canadians.\u201d<\/p>\n

The advocacy initiative is part of the Canadian Real Estate Association\u2019s (CREA) 39th Political Action Committee (PAC) Days, from October 20-22.<\/p>\n

\u201cIt\u2019s essential we strive together to advance effective policies that foster increased housing supply while ensuring affordability and accessibility for Canadians across the entire housing continuum,\u201d said Janice Myers, CREA CEO.<\/p>\n

This year, REALTORS\u00ae are advocating to:<\/p>\n

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  1. Stimulate supply across the housing continuum by embracing innovation through offsite construction technologies.<\/li>\n
  2. Establish a permanent mechanism to collaborate and coordinate housing policy and development, such as a national housing secretariat.<\/li>\n
  3. Extend HST\/GST relief for non-profit-built affordable ownership housing.<\/li>\n<\/ol>\n
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    \"Mortgage<\/figure>\n<\/div>\n

    Mortgage snippets<\/h2>\n