Canadian Association of Accredited Mortgage Professionals (CAAMP) recently published its spring survey and market analysis report last week. Click Here for a copy of the press release and report.
Below are the key findings and observations from the report which was written by CAAMP Chief Economist Will Dunning.
Dunning repeats his belief that the last round of insured mortgage rule changes – nearly two years old now – were not only unwarranted but that their “impacts……are still playing out in the housing market and they are now starting to effect the general economy”.
Here are some noteworthy data points from the spring survey include:
- 55% of home purchases in 2013 were made by first time buyers;
- For recently funded mortgages (2013 and up to the completion of the survey a few weeks ago), 74% of borrowers chose fixed rate mortgages, 20% chose variable rate mortgages and 6% chose combination mortgages;
- 92% of recently funded mortgages had amortization periods of 25 years or less while only 8% had extended amortizations greater than 25 years;
- 47% of recently funded mortgages were obtained from a Canadian bank, 39% were obtained through a mortgage broker and 14% were originated through another origination source;
- There are 9.55 million homeowners in Canada with 5.6 million having mortgages;
- The average mortgage interest rate is 3.24%;
- Average discounting from posted rates for five year fixed rate mortgages is 1.95%;
- Average home equity in Canada is 73% - for those with mortgages, it is 51% and 80% of Canadian homeowners have at least 25% equity;
- For homeowners who purchased in the past ten years, 69% think of their home as a place to live while 31% see their home primarily as an investment. This question was new for this survey.
CAAMP forecasts that the rate of growth in mortgage credit will slow. Over the past ten years, mortgage credit growth has averaged 8.4% annually, but it has dropped to 5% currently and is forecast to be 4.5% by the end of 2015. Total mortgage credit in Canada at the end of 2015 is forecast to be $1.34 trillion.