While headlines reported a 67% surge, the context reveals Ontario's severe delinquency rate was 1.6 per thousand mortgages in Q2 2024. That is actually below the 1.8 per thousand rate seen in 2014, indicating a return to normal levels rather than a crisis.
Markets are pricing in rate cuts at every Bank of Canada meeting this year, with the overnight rate potentially reaching 3.75% by year-end. There is also a possible additional 1% cut in the first nine months of 2025.
Housing starts surged 16% month-over-month to 280,000 annualized units, but this may be temporary. Many developers rushed to get ahead of CMHC changes to the ML Select program, and building permits for multi-unit construction have since declined.
National home sales were down 7% month-over-month in July, while new listings reached ten-month highs. Active listings were up 25% nationally, including a 47% increase in Ontario, meaning more options but also potential price pressure for investors.
Consumer insolvency filings rose 12.4% year-over-year in Q2, consumer spending declined in July, and business loan growth is slowing. These suggest economic headwinds, but also a normalization after a period of exceptional growth and low interest rates.
