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Black groups seek to launch credit union

Adaoma Patterson, president of the Jamaican Canadian Association, one of three entities behind the new bid to bring back a Black-owned financial institution.

Black groups seek to launch credit union

Toronto’s Black population could once again have its own financial institution if a trio of African Canadian organizations can muster enough community support to get the proposed Pan-African Credit Union off the ground.

Although the proposed institution is not exclusive to people of colour, the goal is to provide an alternate banking organization that better serves the Black community in the Greater Toronto Area, and eventually, the rest of the country, said Adaoma Patterson, president of the Jamaican Canadian Association, one of three entities behind the project.

“It’s a lofty goal,” Patterson said. “Well overdue, though.

The group has set an ambitious target for the credit union to open within two years.

“We hope that we can get through all of the stages to launch by the summer of 2021,” she said.

The main aim is to provide financial services to Blacks who have been traditionally under-served or un-banked, she said.

“People have been asking for it for a while,” she said. “This piece was the next logical step.”

While families will be the core of the credit union’s membership, making investments in Black-owned businesses is also key, she said.

 

“The community has always talked about economic empowerment,” Patterson said. “It enables all of the other conversations when you have that economic ownership.”

Running a credit union isn’t unfamiliar turf for the JCA, which operated one, that puttered along before it folded in the mid-1990s.

The Star reported on the demise of the organization in 1995.

Prompted by concerns for members, the Deposit Insurance Corporation of Ontario, which insured individual deposits up to $60,000, assumed control of the Caribbean Canadian African (Ontario) Credit Union on Aug. 31, 1995. Continuing operating losses were cited by the Ministry of Finance, according to Bill Foster, an insurance corporation vice-president, who replaced the board as administrator of the organization.

“This credit union has no reserves and is in a deficit position. Its liabilities exceed its assets,” said Foster at the time.

A lawyer for the former board members said, in early August, 1995, that the only problem was the credit union had spent money anticipating $750,000 in funding from the government and had only received $370,000 of it.

Plans to revive the credit union started to regain some life in 2016, after Patterson assumed the presidency of the JCA.

“We were tackling a lot of other things, but it seemed like the financial institution piece was missing,” she said.

Patterson soon discovered that the JCA wasn’t alone in championing the return of a black-focused financial institution. The Lions Circle African Mens’ Association, also had an interest in establishing a credit union of its own.

It made sense to join forces, she said.

The idea started gaining steam, after the Canadian Black Chamber of Commerce, which launched in 2019, joined the partnership. A steering committee, including people from financial backgrounds, has been meeting weekly, in recent months.

Andria Barrett, president of the Black Chamber of Commerce, said she often fields complaints from small business owners about difficulties in accessing financing from traditional banks.

“I’ve heard countless stories from Black business owners, who have made some money, but can’t get a business credit card or a loan, so we have to create our own,” she said.

Still in its infancy, the group is gathering feedback, via an online survey, to test the community’s appetite for the kind of financial institution they want.

Once the survey closes in March, there will be a clearer indication of whether the concept has enough backing to move forward.

“We have been working towards getting regulatory approval,” Barrett said. The chamber is hosting Rod Phillips, Minister of Finance, next week Thursday, to talk about this and other economic issues.

“We’ve been going to different locations and actually promoting the survey,” she said. “The response has been good overall.”

Patterson said early research revealed a daunting road ahead, as “not many cultural credit unions are being approved in Ontario.”

Provincial regulators must be convinced that a sufficient cohort of people will put their money into such a scheme.

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It’s one of the very reasons the former credit union failed in the 1990s.

“You have to show that people are actually willing to put some money into this as a startup,” she said.

In addition to providing financial services, the new credit union will offer financial education on topics from budgeting to wealth-building, Patterson said.

Entrepreneur and philanthropist, Denham Jolly, is already hailing the potential advent of a credit union as a way to break the financial chains holding back the next wave of entrepreneurs.

“It’s not easy for a Black person to get financing of any nature,” said Jolly, renowned for starting Canada’s first Black-owned radio station FLOW 93.5.

He said Black people have long struggled to walk into a bank and “be taken seriously.”

The former credit union, which went under in the 1990s, had a business plan that required it to hold $5 million in assets by 1997, wrote Cecil Foster, a journalist, author and scholar, in an opinion piece, printed in the Star, in 1995.

Jolly bemoans the missteps that led to the demise of the former credit union, but said that’s water under the bridge.

“I would like to be on the board of governors,” Jolly said about lending a hand on a new credit union.

Foster wrote about efforts by the Black Business and Professional Association and the JCA to to save the old credit union, including a membership drive to get more Black groups and individuals to open accounts.

Barrett said the past will help to guide the current application.

“We see the need and we learn from history,” she said.

Oana Branzei, associate professor at Western University’s Ivey School of Business, said there is a persistent disadvantage minorities, especially those of colour, face, and it holds them back from things such as business startups.

“It is not as severe as the U.K or U.S, but it’s certainly a problem,” she said.

Branzei said specialized credit unions are a catalyst for people of colour to bank in a dignified way.

“When this is a movement from within the community, it feels right,” she said.

Branzei said rejecting a community-driven effort, given the discrimination that has taken place, will be politically hard to do.

Source: Thu., Feb. 20, 2020
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OSFI Hints at Changes to the Mortgage Stress Test Qualifying Rate

changes to stress test qualifying rate

The use of Canada’s benchmark rate in administering the mortgage stress test is currently under review, according to an official with the Office of the Superintendent of Financial Institutions (OSFI).

In a speech to the C.D. Howe Institute, Ben Gully Assistant Superintendent, Regulation Sector, said the use of the benchmark qualifying rate as the floor of Guideline B-20 stress testing for uninsured mortgages is “not playing the role that we intended.”

Uninsured mortgages (those with more than 20% down payment) are currently stress-tested on the higher of the borrower’s contract rate plus 200 bps, or the benchmark rate, which is currently 5.19%.

“For many years, our data showed the difference between the benchmark rate and the average contract rate was about 2%. This provided a healthy buffer,” Gully said. “However, the difference between the average contract rate and the benchmark has been widening more recently, suggesting that the benchmark is less responsive to market changes than when it was first proposed.”

Indeed, fixed mortgage rates have been on a downward trajectory since the beginning of 2019.

mortgage stress testWhat likely won’t be changing is OSFI’s use of the contract rate plus 200 basis points for stress testing uninsured mortgages. “This helps borrowers and lenders manage a sudden change in circumstances such as an income loss, increased interest rates, and/or additional expenses,” Gully said. “This will therefore remain a key part of OSFI’s guideline B-20.”

Gully added that “while we are aware of contrary opinions, “institutions, markets and borrowers have all come to see the value of a qualifying rate even if there remains debate about the appropriate level of responsiveness.”

“It’s an interesting acknowledgement [by OSFI] that the BoC posted rate is now possibly too stringent a test given our market rates,” Paul Taylor, President and CEO of Mortgage Professionals Canada told CMT. “This is very encouraging for the marketplace and own lobby efforts.”

In his speech, Gully also provided OSFI’s take on other aspects of the mortgage industry.

On renewals…

For mortgage renewals, existing lenders don’t typically re-underwrite the loan if the borrower is current with their payments. “OSFI sees this as a reasonable practice…” Gully said. “However, we do expect lenders to update their risk analysis throughout the life of the loan.”

“We will continue to look at this issue closely through regular reporting on rates for new originations and renewals,” he added. “If we see outliers, then we will follow up directly with lenders to understand why this is happening and what they are doing about it.”

On HELOCs…

OSFI recognizes that combined loan products, such as HELOCs, “can make adding more risk easy for borrowers,” Gully said, adding that, “OSFI is concerned that some lenders may be taking on more risk than they bargained for with these open-ended commitments.”

The problem, he noted, is that loan products such as HELOCs can conceal increasing debt loads while payments remain the same.

“This can make assessing credit quality more difficult for lenders,” he said. “We are working with the Bank of Canada to collect data to assess the potential vulnerabilities of these products as well as the larger market and economic issues.”

Canadian Mortgage Trends –
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As gig economy grows, borrowers shut out of mortgage market

As gig economy grows, borrowers shut out of mortgage market 

It seems as if everyone’s got a side hustle these days. More than 40% of Canada’s millennials have worked in the gig economy over the past five years, according to a study from the Angus Reid Institute, and although they’re bringing in extra cash, their side hustle can be a hurdle to qualifying for a mortgage.

Taylor Little is the CEO of Neighbourhood Holdings and noted that more than one-third of their borrowers now identify as gig economy workers, all of whom have turned to alternative sources after being denied traditional mortgage financing. More traditional mortgage lenders look specifically for stable income streams, making qualifying for a mortgage near impossible for non-salaried employees.

Increasing unaffordability in major urban markets (and even that’s expanding beyond the long-time hotspots of Toronto and Vancouver to areas like Montreal) is coinciding with a decreasing ability for a growing demographic to get a conventional loan. At the same time, people aren’t seeing their incomes grow at the same rate as their housing costs.

There are also more opportunities now for entrepreneurship. People are not only looking for additional income, but for ways to capitalize on preferred skill sets or to engage in more flexible work arrangements. The lending challenge is dealing with multiple income streams that can be based on contract, project, season, or a combination of factors.

Some lenders are changing how they approach self-employed borrowers, but many lenders, particularly banks, are still looking at the challenge of reconciling the non-standard income stream with the framework they have to make lending decisions.

“There’s no doubt a lot of work is being done to change things, but for now, the gold standard for bank lending is to have a T4 showing steady income or six months’ worth of bank statements so you can show regular deposits,” Little said. “If you don’t conform to that, the banks have a really hard time wrapping their heads around making you a big loan.”

Little noted the irony of thinking about concentration risk in a loan portfolio versus borrower income; for a borrower with a steady salaried income, there is 100% concentration risk to their job. If that person loses that job, it goes from 100 to 0, whereas for the gig economy worker, it might go from 100 to 80, with a likelihood that they will quickly fill that gap. Borrowers are looking to diversify their income sources for any number of reasons in the same way that lenders attempt to diversify their funding sources.

“From our end, it’s definitely an area where we can help on the alternative side,” Little said. “We are not originating tens if not hundreds of billions of dollars of mortgage per year. We’re in the hundreds of millions, and because of that, we can build our own systems and look at a borrower’s application more holistically. That’s given us that flexibility to serve this part of the market.”

Around 40% of Neighbourhood Holdings’ borrowers are self-employed, Little said. He sees their role as helping borrowers buy time; they get a short-term mortgage but as they pay off their interest-only loan, they’re working with a mortgage broker to help reframe their situation and income to fit into a bank’s box.

Brokers might even want to make the extra effort to market to self-employed individuals because in many cases, these people are unable to walk into a bank and walk out with a mortgage because they’re often shut out by the banks at first glance. Changing expectations and figuring out a plan to get to their ultimate goal takes time. There’s work that borrowers can do, Little said, but it doesn’t happen overnight.

In actuality, Little said, the credit quality of their borrowers is pretty high, and they’re often some of the best types of borrowers that a lender could ask for.

“It’s not criminals and deadbeats . . . these are some of the scrappiest people that you probably want to lend to. They have three different income sources, or four, and these are people that if, if one contract goes away, they’re good at finding another,” Little said.

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Five Tips to Increase Your Credit Score Quickly

tips to improve your credit score
In order to qualify for certain mortgage and loan products, a minimum credit score is essential. Even if your score is sufficient to qualify, you might find the rates being offered will be lower than if you had a higher score.

Having worked with thousands of personal credit histories over the years, we have developed some strategies that sometimes give you that much needed quick score boostsort of like jumper cables for credit!

tips to improve your credit scoreHere are a few scenarios this might help with:

  • You are being pre-approved for a mortgage, but your bank or broker remark your score is too low and you don’t qualify.
  • You want to qualify for a mortgage AND a home equity line of credit (HELOC), but your lender says you need a higher score to get both.
  • You are working with a mortgage broker who is arranging a mortgage with a B-lender for you. She tells you that your interest rate will be lower if your Equifax Fico score is over 680.

And it’s not just about homeownership…

  • You are preparing your pitch to prospective landlords. These days, that often includes your credit report. Your chances will be better if your score is in the 700s or even 800s.
  • You want to apply for a personal line of credit or a high-end personal credit card, but your score is too low.

1. Use The Optimal Utilization Strategy

When maximizing your personal credit score, you should look at your utilization of available credit for each individual credit facility. By this I mean what percentage of your available credit is the balance being reported?

Percentage utilization can have a significant impact on your personal credit score. Equifax Canada states utilization has a 30% weighting on your personal credit score.

Optimal Utilization Strategy for credit scoreOne scenario: maybe a furniture store or a home improvement store offered you “don’t pay for one year.” The balance you are carrying on this card might be relatively small, but if it’s at or over the actual card limit, this is dragging down your personal credit score. Consider paying it off now!

Another scenario: suppose you have three credit cards, each with a limit of $10,000.

And let’s say one card has a balance owing of $9,900 and the other two have zero balances. This might happen because you are trying to earn rewards on one particular card, or maybe you said yes to a balance transfer promotional offer.

Chances are your credit score is lower than if the usage was spread across the three cards equallyi.e., each with a balance owing of $3,300, or 33% of the limit.

Overall, your usage remains unchanged, but now you no longer have an individual card reporting at 99% utilization.

If you can afford to cover or reduce the balance owing on the one with a balance of $9,900, you should see a nice little score boost.

2. Use the Statement Date Strategy

It may be that the best thing for you to do is simply reduce balances owing on your credit facilities. If time is of the essence, you should plan this carefully and do it in the correct order.

Gather up your most recent available statements for all relevant credit facilities. And note the day of the month when the statement was printed. Most of the time it’s the balance on that statement date that is being reported to the credit bureau.

And give or take a day, it is safe to assume that same day of the following month is when the next statement will be issued.

So, plan your payments accordingly. And allow several business days for online payments to process in time. If you are paying a credit card issued by your own bank, you should see transfer payments being processed either instantly or overnight.

3. Pay It Down and Keep It Down

pay down your debtThis is especially important when your limits are not very large. Suppose you are a model citizen who uses her credit card frequently, and pays the balance in full every month after receiving the monthly statement, and before the due date.

That is the “correct way” to manage your credittaking advantage of the grace period you are given by all card issuers.

But these days, there is little benefit to trying to use up the entire grace period because current account interest rates are so low they are pretty much negligible. It’s far better to pay your balance in full before your statements come out. You are even more of a model citizen, and now the balance being reported to the credit bureau will always be extremely small, if anything.

4. Exercise All Dormant Credit Cards and Lines of Credit

Some people have credit facilities they never use. People tend to favour one particular credit card (maybe we like their rewards program) and we might neglect our other cards. And most of the time we don’t even need our personal line of credit.

If you are trying to maximize your credit score, it is good to use all available credit fairly regularly, even if it’s just for a nanosecond.

It will rarely be correct to close these older credit facilities since they are contributing ‘score juice.’ Equifax Canada states your history can have a 15% weighting on your personal credit score.

These credit facilities can become stale and may not be not pulling their weight on your personal credit history. Update the DLA (date of last activity) with a modest transaction and then pay it online immediately. If it’s a personal line of credit, just transfer $10 to yourself and the next day transfer back $10.50.

If you notice you have credit cards that have not seen daylight for months or years, take them to the supermarket or gas station, use them just once, and pay online right away. After the next statement these cards will report the date of last activity as the current month and year, and that may give you some much-needed points.

5. Scour & Clean All Reporting Errors

There might be some incorrect information in your personal credit history that’s needlessly dragging down your score.

A few examples include:

  • You have two or more personal profiles with the credit bureau and your information is scattered and diffused. Combining it all into one credit report could well increase your score and strengthen your look. (This often happens to people whose name is hard to spell, or who have legally changed their name).
  • Late payments being reported when it’s not you. Maybe you have a relative with the exact same name.
  • That router you returned to the cable company is showing as a collection; but in fact you returned it to the local store.
  • You completed a consumer proposal and all the debts included in the proposal should be reporting zero balances and should not carry an “R9” rating. This generally means an account has been placed for collection or is considered un-collectible.
  • There may be incorrect late paymentsEquifax Canada states payment history has a 35% weighting on your personal credit score.

Mortgage brokers can fast track an investigation with Equifax Canada for you. What might take you two months, we can get done in a few days. Keep that in mind if time is of the essence.

improving your financial healthThe Takeaway

This overview is a fairly simplistic way of looking at your personal credit report and highlights initiatives specifically intended to give your credit score a quick boost. These tips are not necessarily the same as when you are managing for optimal credit health or interest-expense minimization.

Ideally, you are working with someone who understands all the nuances and who can help you determine what your priorities should be.

Source:CanadianMortgageTrends – 
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TD Bank Cuts Its 5-Year Posted Rate

Will the Stress Test Rate Follow?

After six long months of no changes to the big banks’ posted rates, TD Bank broke the ice on Tuesday by lowering its 5-year posted rate to 4.99% from 5.34%.

While the big banks adjust their “special” rates regularly (as RBC did last week), changes to their higher posted rates are more rare. And the move is important because it means other banks are likely to follow, and if enough do, it will lead to a drop in the 5-year benchmark qualifying rate…i.e. the stress test rate.

That would be welcome news to the countless mortgage shoppers out there who are struggling to qualify at the current benchmark rate of 5.19%.

“Based on current market conditions, lower funding costs have led to a growing variance in customer rates versus posted rates,” a TD spokesperson told BNN Bloomberg. “This rate decrease aligns TD’s 5-year fixed posted rate more closely with current customer rates.”

And that’s all true. Bond yieldswhich lead fixed mortgage rateshave plummeted roughly 30 basis points since the start of the year. And the big banks keeping their posted rates artificially higher (in TD’s case, it hasn’t cut its 5-year posted rate since March 2019), has started to draw attention from key industry players.

The OSFI Effect

TD’s rate drop suspiciously comes just days after a speech from Ben Gully, Assistant Superintendent at the Office of the Superintendent of Financial Institutions (OSFI), which regulates federal financial institutions.

Ben Gully, Assistant Superintendent, OSFI
Ben Gully, Assistant Superintendent, OSFI

In his speech, Gully admitted the use of the benchmark qualifying rate as the floor of Guideline B-20 stress testing for uninsured mortgages is “not playing the role that we intended.”

“For many years, our data showed the difference between the benchmark rate and the average contract rate was about 2%,” Gully said. “However, the difference between the average contract rate and the benchmark has been widening more recently, suggesting that the benchmark is less responsive to market changes than when it was first proposed.”

Some in the industry suspect that speech was the stick that broke the camel’s back and finally pushed the banks (or at least one of them) to adjust their qualifying rate.

Ron Butler of Butler Mortgage said TD’s move “absolutely” was a result of Gully’s comments, and he expects others to follow within the next week.

“We will see a 4.89% qualifying rate in the spring, if not sooner,” he told CMT.

Impact on the Stress Test

mortgage stress testEven if the qualifying rate were to drop that much, a 30-bps reduction would still only have a “minimal effect” for buyers  struggling to qualify, he said. Anecdotally, Butler estimates about 300 to 400 mortgage applicants he deals with each year have trouble qualifying under the stress test.

A recent survey from Zillow and Ipsos found that half of Canadians (51%) say they are concerned that stricter rules will prevent them from qualifying for a mortgage, up five points since 2018.

If the qualifying rate were to drop to just 4.99%, that would require roughly 1.8% less income in order to qualify for the average Canadian home, according to Rob McLister of RateSpy.com. It would also increase buying power by nearly 2%.

“These effects may seem small at the margin, but they’re magnified when you’re talking about thousands of buyers across Canada,” he wrote. “A lower stress test rate would also help refinancers qualify for bigger loans. Someone with an average home making $100,000 a year would qualify for a $9,000 bigger mortgage (+/-) if the stress test rate dropped to 4.99% from 5.19%.”

The ball is now in the court of the other Big 5 banks to determine what happens to the qualifying rate. You can be sure many prospective homebuyers will be watching closely.

Source: Canadian Mortgage Trends – Steve Huebl February 5, 2020
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The House passed Ayanna Pressley’s credit score reform bill. Here’s what it would do

BOSTON, MA - 01/20/2020 Congresswoman Ayanna Pressley speaks during a panel conversation at the annual MLK Memorial Breakfast Committee, the nations longest-running event honoring the legacy of Dr. Martin Luther King Jr. The event hosted an audience of over 1,350 guests including business, civic, community and religious leaders.  Erin Clark / Globe Staff
Rep. Ayanna Pressley speaks during a panel conversation at the annual MLK Memorial Breakfast last week in Boston. –Erin Clark / The Boston Globe

Rep. Ayanna Pressley says she is “thrilled” that the House of Representatives passed her bill to reform the credit report system, though the legislation’s future in the Senate is unclear.

The House approved the Comprehensive Credit Reporting Enhancement, Disclosure, Innovation, and Transparency (CREDIT) Act on a mostly party-line vote Wednesday afternoon.

Pressley — who has championed often-arcane financial reform bills during her first term in Congress — says the legislation would address a “fundamentally flawed” system that can impede upward economic mobility in a country where “our credit reports are our reputations.”

“When credit reports determine where you can live, work and how much you will have to pay for everything from a car to a college degree, consumers deserve a system that ensures equity, transparency and accountability,” the Massachusetts congresswoman said in a statement. “American families are finding themselves trapped in cycles of debt, simply for trying to afford basic needs like healthcare and education.”

Pressley also made her first House floor appearance after revealing she had lost her hair due to alopecia to speak in support of the bill Wednesday.

She also later tweeted about the landmark day.

The Comprehensive CREDIT Act includes measures to make it easier for the estimated 20 percent of consumers who have a “potentially material error” on their credit report to seek corrections; limit the use of credit scores for employment purposes; expand the opportunity for student loan borrowers to improve their credit scores; restore credit to victims of predatory agencies; ban the reporting of debt incurred from “medically necessary procedures” and delay the reporting of other medical debt; shorten the time that most adverse credit information stays on a report from seven years to four years, and from 10 years to seven years in the case of a bankruptcy; and bolster the Consumer Financial Protection Bureau’s oversight of the industry.

According to CFPB data, the watchdog agency has received more than 326,000 complaints against credit reporting agencies since 2012, which accounts for nearly 22 percent of the total complaints filed during that time period.

According to Pressley’s office, the Comprehensive CREDIT Act comprises tenets of several other bills introduced by fellow members of the House Financial Services Committee. However, the Boston Democrat authored the student loan-focused section of the bill, which would:

  • Establish a credit rehabilitation process overseen by the CFPB for borrowers facing economic hardship to repair their credit profile.
  • Prohibit credit reporting agencies from including any information on a credit report relating to a delinquent or defaulted student loan after the borrower makes nine on-time monthly payments.
  • Provide a grace period for borrowers seeking rehabilitation but experiencing significant financial hardship or other extenuating circumstances such as certain military deployments or residing in an area impacted by a major disaster.
  • Require private lenders offering repayment plans to borrowers seeking rehabilitation to offer affordable monthly payments and additional assistance.

Student debt has become an increasing burden for students in Massachusetts. A study in 2018 found that the average debt load for Bay State graduates increased by 77 percent between 2004 and 2016, faster than in any other state in the country except Delaware. According to Pressley’s office, more than 855,000 borrowers owed a total of $33.3 billion in student debt last year in Massachusetts — and nearly 100,000 are behind on their loans.

“Even if we wipe out all student debt tomorrow, the devastating impact on consumers’ credit would remain for years to come,” Pressley said in her speech. “For that very reason, we must give folks a real chance at recovery and repair.”

The bill passed the Democrat-controlled House by a 221-to-189 margin. With the exception of two moderate Democrats who joined Republicans to vote against the legislation, the vote was divided by party lines.

For the legislation to proceed any further, Democrats will likely have to wait until at least another election. Sen. Mitch McConnell, the Republican-controlled Senate’s majority leader, has repeatedly ignored the hundreds of bills passed by House Democrats.

Massachusetts state lawmakers have also recently proposed new protections for student borrowers in the wake of relaxed federal oversight under President Donald Trump.

Source: Boston.com – Boston News – , January 30, 2020
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Planning to buy a snowbird retreat in Florida?

Florida’s housing market is constrained by tight inventory which is not likely to improve significantly due to several challenges cited in a new report from Florida Realtors.

Chief Economist Dr. Brad O’Connor sees robust growth for the market with strong immigration and low unemployment in the state. Home sales are expected to gain 4% year-over-year in 2020, similar to 2019.

Last year, Florida saw an uptick in sales despite a 9% pullback from international buyers.

“It was exciting to see the almost 6% growth (5.9%) in closed single-family sales in 2019 from 2018,” O’Connor said. “Florida topped over $100 billion (total of “$101.9 billion) in volume in home sales last year, up 8.3% from 2018; for condo-townhouses, we reached $31.6 billion in volume, up 1.8% over the 2018 figure.”

But with new listings down 11.4% year-over-year for single-family homes and down 9.7% for condos, prices are set to rise around 4%, although O’Connor doesn’t see that as a problem currently.

“The median sales price still continues to rise, but looking at what the monthly mortgage payment is, that’s still a lot lower due to current historically low mortgage rates,” O’Connor said. “And that continues to drive sales and makes it a good time to buy.”

Supply side issues
The challenges to increased supply in Florida were discussed at the 2020 Florida Real Estate Trends summit during last week’s Florida Realtors Mid-Winter Business Meetings.

One of the panelists was Kristine Smale, senior vice president, Meyers Research, who says that there are three main factors restricting supply: higher construction costs, which moderated slightly in 2019 but are expected to rise again in 2020; a shortage of labor – 2019 had the largest amount of construction job postings since the Great Recession; and a lack of available, affordable land supply.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Source: Canadian Real Estate Magazine – by Steve Randall 28 Jan 2020

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