Weekly Digest

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November 21st, 2024

Partner Trip for 2025

April (Spring) 2025, our annual realtor trip will be held in Nashville, Tennessee.

Qualifying is easy. Send $1,500,000 in total closed mortgage business to automatically qualify.

To date, we have 7 realtors who have already qualified.

Canada Consumer Price Index

CPI growth overshot estimates, but analysts foresaw an increased reading given expected property tax increases (+6%). A 50 BpS cut was a coinflip a few days ago, now it’s just a 1 in 4 shot after this recent data set.

• Headline inflation: 2.02% y/y (est. 1.9% | prior: 1.6%) and 0.4% m/m

• Average core inflation: 2.55% y/y (est. 2.40% | prior: 2.35%)

Trump Era & Rate Outlook

Some burning questions moving forward and their impact on interest rates include;

• Will Trump impose heavy tariff’s?

• How much will his pro-growth policies (tax cuts, deregulation, etc.) effect the global economy?

• Will bond markets punish U.S. Treasuries for soaring debt, leading to tightening financial conditions that exert drag on the economy?

• Will our loonie continue to decline?

How did the markets react to Trump Election?

• US stocks gained:

  • Tax Cuts are expected to reduce corporate tax rates, which could be a major win for tech companies, leading to increased investments, stock buybacks and dividends.

• Bond price adjustments:

  • Analysts believe the Federal Reserve might hesitate to cut interest rates, given that potentially higher deficit spending might boost the U.S. economy and drive-up inflation.

• USD increased:

  • Driven by expectations of stronger economic growth.

• Energy stocks rallied:

  • Trump has pledged to go after “restrictive” climate policies. Oil and gas companies are set to be prime beneficiaries.

Rates

Deep discounts on fixed rates are starting to disappear. Bond yields have moved up since the US election. Rate ranges are below:

• 3 yr fixed / Conventional – 4.14% to 4.30%

• 3 yr fixed / Insured – 4.04% to 4.14%

• 5 yr variable / Conventional – Prime – 0.70% = 5.25%

• 5 yr variable / Insured – Prime – 1.00% = 4.95%

For the Bank of Canada meeting on Dec. 11, rate cut probability:

• 50 bps cut: 18% chance

• 25 bps cut: 82% chance

For the Federal Reserve meeting on Dec. 18, rate cut probability:

• 25 bps cut: 59% chance

• No change: 41% chance

US Fed Meeting, Nov 6th

The US cut their policy rate by 0.25%. This was priced into the market well in advance, and did not come as a surprise. With the change in presidency, the Fed will continue to ease their policy rate further, but it looks like it will be at a slower pace than originally projected. JP Morgan’s economists now expect the Fed to lower rates every other meeting from March until it reaches 3.5% (compared with 3% earlier).

Renewal Wave

55% of mortgages on Canadian bank balance sheets will renew in the next two years, Mihelic estimates, and 85% in three years.

Realtor Dip

The Toronto Regional Real Estate Board is on track for its first year-over-year drop in membership numbers in decades. If the current number of just over 73,000 stands, it would mark a ~3% dip from 2023’s peak. 

Labour Force

Policymakers may not want the labour market to slow any further, but that is exactly what happened in October. Although the unemployment rate did not change, a closer look shows that there was a 33,000 rise in youth employment, while employment among prime-age workers fell for the first time since May.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.34%

• 3 year fixed, 30 yr amortization – 4.44%

• 2 year fixed, 30 yr amortization – 6.00%

• 5 year variable, 30 yr amortization – Prime – 0.70% = 5.25%

• 5 year fixed, 25 yr amortization – 4.29%

• 3 year fixed, 25 yr amortization – 4.44%

• 2 year fixed, 25 yr amortization – 5.95%

• 5 year variable, 25 yr amortization – Prime – 0.80% = 5.15%

INSURED

• 5 year fixed, 25 yr amortization – 4.29%

• 4 year fixed, 25 yr amortization – 4.39%

• 3 year fixed, 25 yr amortization – 4.24%

• 5 year variable, 25 yr amortization – Prime – .95% = 5.00%

Fast Facts

• $282,000,000 – Toronto expects the revenue gain from Taylor Swift’s era’s tour at the Rogers Center. 240,000 is the projected number of attendees over the 6 shows.

• 15 – Complaints per 100 flights received by Flair Airlines from April 2023 to June 2024, the worst of any Canadian airline. Porter scored the top rating of 1.3 complaints per 100flights.

• 67% – Share of Canadian students who usegenerative AI for schoolwork say they aren’t learning as much. About 63% ofstudents use AI tools a few times a week.

• 199 – Hours per year that the average Torontonian spends in traffic, the equivalent of over eight full days. Toronto’s congestion has consistently ranked among the world’s worst.