Ontario Housing Market as of July-August 2022

Ontario's housing market is being impacted by a combination of factors, including stricter lending guidelines, higher interest rates and rising mortgage rates.The average price of a home in Ontario decreased 0.5% year-over-year to $831,473 for July-Aug 2022.

Toronto Real Estate Board President and Real Estate Agent In London, Ontario

said "The supply of listings in the GTA has not kept up with demand in many neighborhoods over the past year and this, combined with the fact that home buyers are seeking homes that are more affordable than those currently listed, is creating a challenging situation for buyers in many parts of the region."

Estimates According To Real Estate Agents

We expect home prices will continue to be moderate in the second half of this year as we move through the peak season for buying activity, However, due to sustained listing supply constraints, particularly in condominium apartments and townhouses, home price growth will likely remain modest going forward." Said by a Real Estate Agent In London, Ontario. 

The MLS HPI benchmark was up 0.1% year-over-year to $557,900 for July 2022. The average price of a home in the GTA decreased 0.1% year-over-year to $734,053 for July-Aug 2022.

The number of new listings on TREB's  System was down by 9.4% year-over-year to 4,836 for July-Aug 2022, which is the lowest number of new listings reported since August 2017.Ontario's housing market is being impacted by a combination of factors, including COVID pandemic, mortgage and high interest rates on properties. 

Decline in prices declared by Real Estate Agent In London, Ontario

Home prices showed a flat year-over-year average sold price of $667,000 in July. This was the first time since December 2019 that home prices showed no increase year-over-year.

This is a far cry from what we’ve seen over the past several years. From March to June prices increased by an average of 6% year-over-year. However, the tide has turned and GTA home prices are now showing negative annual growth for the second straight month.

It is worth noting that this continues to be the lowest number of homes sold since February 2015. In addition, GTA housing inventory has increased by 19% year over year to 21 months worth of supply in July.

Home sales in Ontario have been trending downwards since May and this continued in July as well with 16,000 homes sold province wide – a 2% decrease from June and 9% fewer sales than what was recorded in July.

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.