May 2023 Update

Date: May 31, 2023

I scream you scream, we all scream!

What’s happening with rates?

I couldn’t help it…with the hot weather and the hot rate market – girls got to have some fun amidst all this seriousness.

Now let’s get serious about what’s happening in the mortgage world.

I wanted to make it easier for you to read by breaking this update into a few sections.

Mortgage Delinquencies

Anticipated Bank of Canada (BOC) announcement

Fixed Rate Increases

What’s Happing to Home Sales and Prices

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Mortgage Delinquencies

Currently, mortgage delinquency is near a record low at .16% nationally. I said it before, and I will say it again, Canadians will do everything they can to ensure they don’t default on their mortgage, and a quick second is car payments. Hard as it may be, homeowners have been resilient in staying educated and on top of their debt and spending.

Anticipated Bank of Canada (BOC) announcement

So what’s happening? I don’t envy the BOC and the decisions they have to make this year; it’s a tough one. They are worried about inflation sticking.

To be clear, inflation sticking means that we get used to paying $30 for a Pizza Hut personal deep dish pizza (true story) and if we continue to spend and get used to paying more for items, then inflation will stick. WE DO NOT WANT INFLATION TO STICK, so they do what they know will hit us where it counts our wallets.

Currently, no one is happy about the state of affairs; interest rates are high, making it harder to qualify and carry a mortgage and a car payment.

So what can we expect?

The earlier predictions from economists saying they expect a decrease in rates quietly and quickly disappeared from most dialogues (not this Mortgage Broker; I’ve always stuck to the fact that I don’t see rate cuts, if at all, until mid-2024)

Based on everything we are hearing, there is a good chance that we may see a slight increase in the overnight rate on June 7. Central banks worldwide are indicating they are not done with rate hikes.

When the US continued to increase their rates, we held. Since March 2022, our neighbours in the US have seen rates increase by 5%. We are trailing behind at this point, with rates only 4% higher than in March 2022.

I go back to my statement that this is a World Economy issue, and we are all in this together.

If I had to make a prediction (and you know how much I love that), we will likely see a slight increase (possibly a hold) in June, but I do not see a drop.

Fixed Rate Increases

Over the past two weeks, lenders have increased rates, with some being more than .70%. This increase is mainly due to the 5-year bond yield, which currently sits at a 14-month high of 3.58% as of May 30. That’s a significant increase from the 2.87% we sat at earlier in May.

Historically most Canadians want a 5-year fixed since that product offers the best rate. However, this year, many Canadians opt for shorter-term mortgages, such as the two and three-year fixed rates, even though those rates are higher. Why? Because we are a hopeful bunch, and we know this too shall pass.

What’s Happing to Home Sales and Prices

Home sales seasonally adjusted across Ontario have increased by 1.3% in the first quarter of 2023. This remains the lowest level of home sales since 2008-2009 outside of the pandemic.

What’s important here is the steep drop in supply. New listings were down 15.9% in the first quarter, and active listings – on the market are down 17% in Ontario.

There is so much data that I can share, but there is only so much you can absorb, so here is a quick link for anyone interested in reading on

Mortgages can be complicated; we are here to help you make “cents” of it.

We focus on Mortgage Solutions, Period!

To learn more connect with Ana Cruz 905.870.0513 or email at ana@askanacruz.ca