Sneak Peak Into Mortgage Purchase Rates Fluctuations

 The housing market is still on the mend, but the pace of improvement has slowed since last year, according to data released by the group association of realtors in August. Nearly two-thirds of Canada's homeowners are underwater and more than one in five borrowers owe at least double the value of their home, according to a real estate agent in Aurora Ontario. Home prices have been inflammatory enough that it’s not as if people are just turning up their nose at buying any longer but there are many things that have to happen for a sustained housing recovery to take hold. 

Lenders will have to be more flexible in granting mortgages, buyers will need to be willing to pay market price and builders must continue to step up construction.The recovery is not going to be a V-shaped one as we are still very early in the process said by a real estate agent in Aurora Ontario. 

The Latest Mortgage Rates 

Mortgage rates increased this week, but remained lower than a year ago. 

• The 15-year fixed rate mortgage averaged 4.55% this week, down from last week’s 4.13%. 

• One year ago, the 15-year FRM averaged 2.16%.The 30-year fixed-rate mortgage averaged 5.505% for the week ending March 25, up from last week’s 4.46%.

• The 5/1 adjustable-rate mortgage averaged 3.29% this week, down from last week’s 3.37%. 

• A year ago, the 5/1 ARM averaged 2.77%.A year ago at this time, the 30-year FRM averaged 5.261%.

• The survey covers approximately 80 percent of all Canada retail residential mortgage applications and has a total annual sample size of over 100 million records.

Situation Of Residential Mortgage Credit In The Market

The mortgage market was not as active as it had been in recent years. In addition, the share of banks offering 30-year fixed-rate mortgages with loan-to-value ratios greater than 90 percent fell to about one-third of all banks, down from about half in early 2019.

The average credit score for new mortgages increased slightly to 707, up from 705 in April and from 696 in May 2017. For borrowers with scores below 660, however, the share of new mortgages declined to 19 percent from 26 percent a year ago. The average credit score for new mortgage borrowers remained unchanged at 732 for the consecutive years.

The share of loans originating with down payments of less than 10 percent fell to 9 percent in May from 11 percent a year earlier and 15 percent two years earlier. The share of loans being originated with down payments between 10 and 20 percent remained unchanged at 27 percent. 

Borrowers making down payments between 20 and 50 percent accounted for 51 percent of loans originated in July, compared with 57 percent a year earlier and 62 percent two years earlier. The share of loans being originated with larger down payments (50% or more) declined to 13 percent from 15 percent a year earlier but remained elevated compared with its pre recession level about 9%.

In response to the reduced availability of credit on favorable terms, many homeowners continued to modify their mortgages by extending their loan terms or reducing their monthly payment amounts instead to get a property of their own.