CMHC Housing Forecast Weaker

 

CMHC Housing Forecast Weaker than Originally Thought


We all know there’s a softening going on right now in most Canadian housing markets. Homebuyers know it, home sellers know it, and now, CMHC knows it, too. While the Crown corporation has undoubtedly seen the softening going on for several months, now they’ve come out with a new forecast for the remainder of this year. And it’s not as optimistic as their last forecast was.

 

 

As you can see from the chart above, the numbers in most housing categories have gone down, albeit very slightly, from the previous forecast. Given the fact that most of these categories have to do with prices, it may or may not spell good news for the housing market, depending on your outlook.

• The number of existing homes to be sold this year, according to CMHC, will be about 465,600 – a drop of about 20,000 units from the organization’s forecast this past summer. While home sales being down doesn’t typically spell good news, this will bring demand down, which will also have an affect on prices (which is great!)
• Resale prices will drop by about $3,000 when sales for pre-existing homes fall to an average of $365,100.
• Average mortgages on new homes will also fall to about $370,500, about $6,800 lower than what was estimated. This could be very good news, as prices are simply too high right now and keeping too many out of the market.
• In 2013, CMHC predicts that up to 489,700 units will be sold; that’s up by about 2,100 from their earlier forecast.
• Housing starts for this year will be somewhere in the range of 210,800 to 216,600. That’s slightly higher than the previously forecasted range of 196,800 to 217,000. Next year that range is going to drop from 2012′s number though, as it’s expected to be only 177,300 to 209,900 starts.

Think this bodes bad news? It really all depends on your perspective. If you saw our housing market this past year as being a healthy one, yes, the results are probably a bit disappointing. But truthfully, the drop in numbers is going to help us all. As prices go down, more options are opened up and more people can get back out on the market (such as all those that have been patiently waiting for prices to drop.) It also means that there will be more competition on the market, but this time it could be among sellers trying to get buyers to their properties – which is great for anyone looking to buy!

And there’s also the fact that the housing market isn’t the be-all-end-all of Canada’s economy. Yes it does make up a large portion of it, but we do have other supporting factors we can rely on. Mathieu Laberge, deputy chief economist at CMHC, says, “A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year.

He also says, “Nevertheless, employment growth and net migration will help support housing starts activity going forward.”


Kate10 November, 2012, 4:00 pm

TMG- What We Know About You – Mortgage Consumers

The 2012 Mortgage Consumer Survey prepared by Canada Mortgage and Housing Corporation (CMHC) tells those in the mortgage industry a lot about you, the consumer – your buying habits, where you go to look for information, the kind of information you look for, etc.

The online survey was completed over February and March of 2012 by more than 3500 mortgage consumers who had completed a mortgage transaction in the previous 12 months. Here are few highlights of that survey:

Online Activity

• When researching mortgage information, 71% of consumers went online; this is up from 65% in 2011.
• Facebook was the most popular social media network used to gather information, especially among first time home buyers.
• The two most actively searched items were interest rates at 86% and mortgage options at 73%.
• And not surprisingly, 38% of 18 to 24-year-olds used mobile mortgage apps.

Using Professionals

• Consumers are turning more to mortgage professionals to help them with their mortgage decisions.
• Consumers are asking a lot more questions about mortgages – 71% asked about differences between mortgage products; 67% wanted information about mortgage loan insurance; and 67% asked about penalty clauses.
• Consumers like referrals and most referrals come from a family member or a financial planner.

The Mortgage Process

• Before making a decision about a mortgage, consumers spend about five weeks doing research; first time home buyers spend about eight weeks.
• Consumers are now more prepared when meeting with their mortgage professional and come armed with a list of questions and the necessary documentation.
• Eighty per cent of consumers felt confident they made the best decision with their mortgage product.

Mortgage Free

• Thirty-one per cent of mortgage holders made lump-sum payments or increased their regular payments to pay off their mortgage sooner.
• Nearly half of all buyers set their monthly payment higher than the minimum to pay off their mortgage sooner.

The survey findings are positive indicators that consumers are increasing their knowledge about financial matters. Four in ten home buyers went online and did a financial self-assessment. And a whopping 80% felt they had a good understanding about how much they could afford and what options were available to them.

Consumers who educate themselves about the financial options available will learn how to make consistent, informed financial decisions and that will help them to achieve their goals. This survey shows that Canadian consumers are on the right track.

The survey also makes clear that mortgage professionals are in a unique position to help educate consumers about their mortgage options and ways to pay off that mortgage sooner.

Thanks to CMHC for conducting the survey and TMG for putting results in a blog.

CMHC
http://blogger.mortgagegroup.com/2012/05/what-we-know-about-you-mortgage.html






Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com
Your Mobile Mortgage Professional in The Comox Valley

CMHC Survey about Home Owners

A recent survey from CMHC says the vast majority of Canadians renew their mortgages with their original lender, but you can save thousands over the life of a mortgage by looking at competing rates from competing institutions and mortgage brokers.



I am a mortgage broker and may be able to save you money.
Contact me for a free check up on your mortgage.

akroemer@mortgagegroup.com
1.250.650.4182