Weekly Digest

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July 12th, 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 3 realtors who have already qualified.

Employment Data

Cracks in the labour market increase the urgency for more cuts.

Unemployment has increased to 6.40% and now sitting well above the pre-pandemic average of 5.70%.

The unemployment rate for Canadians aged 15-24 rose to 13.5% last month, the highest rate seen since 2014 (not including the pandemic). The employment rate among university students looking for summer jobs is currently the lowest since 1998. All signs of a very weak economy.

The surprise 1,400 decline in employment was driven by another fall in full-time employment, with part-time employment edging up by just 1,900. That comes alongside other labour market data suggesting that demand is softening, with hiring intentions being very weak.

US Inflation

U.S. financial markets got a boost yesterday with a lower-than-expected inflation reading, marking the lowest level since May 2020.

Year over Year US Inflation came in below market expectations at 3% (market was 3.1%).

Core inflation came in at 3.3% on a market consensus of 3.4%

This directly impacts the U.S. 10 year Treasury yield, which the 5-year Government of Canada (bond yield) follows closely. The 5 year bond dropped about 11 basis points yesterday due to this news.

Population Changes & Housing

Canada’s population growth will slow dramatically to an average of 0.8% annually from 2025 to 2027. This is after surging by 3% annually in 2024 and 2023.

Overall, this means about 400,000 fewer homes will need to be built by 2030 than we had previously estimated. 300,000 temporary residents currently residing in Canada will be offered permanent residency, while the remaining 500,000 will have to leave Canada by 2027.

Based on this outlook and government home building initiatives, Canada should have the ability to meet its housing needs for future population increases starting as early as 2027. Yet, we are still playing catchup for the excess admittances from prior years.

A never ending cycle…

Condo Appraisals

Soft condo appraisals are becoming a growing problem.

Adding financing or appraisal conditions to condo purchase offers is a good idea in this market. If you have a buyer purchasing a new home who needs to sell their condo, our advice is to sell first.

GTA condo inventory is almost 70% higher than the 10-year average (and growing).

“New construction units that entered under contract in late 2021 to mid-2022 are coming in below purchase price on a regular basis,” says Christopher Bisson, Founder & CEO of appraisal management firm ValueConnect.

We are consistently seeing pre-con units purchased for $1,300-$1,400/foot coming in closer to $1,000-$1,100/foot.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.89%

• 3 year fixed, 30 yr amortization – 5.09%

• 2 year fixed, 30 yr amortization – 6.00%

• 5 year variable, 30 yr amortization – Prime – 0.90% = 6.05%

• 5 year fixed, 25 yr amortization – 4.79%

• 3 year fixed, 25 yr amortization – 4.99%

• 2 year fixed, 25 yr amortization – 5.95%

• 5 year variable, 25 yr amortization – Prime – 0.95% = 6.00%

INSURED

• 5 year fixed, 25 yr amortization – 4.49%

• 4 year fixed, 25 yr amortization – 4.54%

• 3 year fixed, 25 yr amortization – 4.64%

• 5 year variable, 25 yr amortization – Prime – .95% = 6.00%

Fast Facts

• $1.12 billion. Total contracts given to NHL players on the first day of free agency, setting a new record for a single day. More than 100 players in the league changed teams.

• 29 – Turtles that a woman tried to smuggle across the border from Vermont to Québec on a kayak. The turtles, which are an endangered species, are worth a total of $40,000.

• 55% – Canadians aged 18 to 34 who are holding off on having kids because of the housing crisis, according to a new study. A scarcity of multibedroom rentals is a major factor.