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Mortgage Professionals Canada is excited to announce a new collaboration with Oxford Economics, presenting the Housing and Mortgage Market Review. This publication is designed to provide readers with the latest economic trends and forecasts, crucial for effective mortgage planning.

We are delighted to share the first edition of the quarterly report, which delivers essential insights into the changing landscape of Canada’s housing and mortgage markets. Below, you will find a summary of the principal findings and a link to the full report.

Interest Rates and Economic Outlook

  • The Bank of Canada maintained the policy interest rate at 5% in April 2024, with expectations to hold until June, followed by a decrease to 4.25% by year-end.
  • The Canadian economy experienced modest growth in late 2023 due to strong exports but is anticipated to face a downturn in 2024. This downturn is attributed to the impact of past interest rate hikes on highly indebted households, which could weaken housing markets and business investments.

Housing Market Trends

  • National average home prices are expected to decline by 5% by late summer 2024 and could bottom out in fall, eventually settling around 20% below the February 2022 peak.
  • The correction is more pronounced in expensive markets like Toronto and Vancouver.
  • Housing starts are forecasted to decrease due to higher mortgage rates and economic challenges, despite government efforts to encourage more housing supply.

Mortgage Market Dynamics

  • Mortgage rates are expected to decline gradually following the anticipated Bank of Canada rate cuts in the second half of 2024.
  • Over 2 million mortgages are expected to renew in 2024-2025, with many at higher rates compared to previous years. This could strain household finances, particularly if a recession deepens.

Regional Variances

  • British Columbia and Ontario are facing significant economic and housing market slowdowns due to high interest rates and other economic pressures.
  • Alberta shows relative resilience, supported by the strength of the oil and gas sector and robust population growth.
  • Atlantic Canada remains resilient due to strong population growth driven by immigration, benefiting sectors like tourism and consumption.

Future Projections

  • Despite current challenges, there are potential medium-term recoveries across various regions, supported by population growth and sector-specific recoveries.
  • Inflation is expected to ease, aligning closer to the Bank of Canada's target by the end of 2024.

This report indicates a cautious yet hopeful outlook for recovery in the housing and mortgage markets, contingent on broader economic conditions and the effectiveness of policy measures. Access the full report by clicking here and reach out to me with any questions.

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