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November 5, 2024 | Home Listings Rise as Pandemic-Era Mortgages Approach Renewal
Danielle Park
A new CMHC report notes that 1.2 million mortgages are up for renewal in 2025 and 980,000 in 2026. About 85% have fixed rates contracted when mortgage rates were below 2% compared with over 4% today.
Although the Bank of Canada has lowered its base rate from 5 to 3.75% since June, Canadian fixed-term loan rates have risen over the past month as government bond prices dipped, driving up yields/fixed borrowing rates.
In the historically slow season for real estate transactions, a flood of stressed homeowners are putting their properties up for sale. See More than a million mortgage renewals in 2025 could mean a listings surge as stressed owners sell homes they can’t afford.
The trend is particularly evident in private lending, where higher interest rates and less stringent lending standards led to homeowners becoming particularly overextended.
In the second quarter of 2024, the percentage of single-family homes with mortgage payments that were late 60 days or more was 5%, up from 1.7% in the fourth quarter of 2022.
Car loans, credit cards, and credit lines have also significantly increased late payments. CMHC noted, “Credit card and auto delinquencies can be leading indicators of mortgage delinquency rates, so these patterns suggest that mortgage delinquency will continue to increase into 2025.”
A new Angus Reid poll finds that 42% of Canadians say they are financially worse off today than at the start of the year. See, Feeling the financial pinch? You’re not alone:
Almost three-quarters of Canadians have “delayed” major financial goals or milestones due to the “current economic climate,” according to new survey data commissioned by the online estate planning platform Willful and collected by the Angus Reid Forum.
Nearly half of respondents said they’ve “had to use savings to cover day-to-day expenses” over the last 12 months, while 42 per cent of Canadians say they’re in a worse financial situation now than they were at the beginning of the year.
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Danielle Park November 5th, 2024
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