Canada Mortgage Debt Growth Slows Amid Rising Homeowner Financial Strain CMHC Reports


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The Canada Mortgage and Housing Corporation (CMHC) reports that Canada's residential mortgage debt reached $2.16 trillion in February, a 3.4 percent increase from the previous year, marking the slowest growth in 23 years. This sluggish growth is attributed to higher mortgage costs and uncertainty about potential changes in the Bank of Canada’s interest rate, which have slowed home sales and prices in many regions.

Despite the slowdown, CMHC anticipates a rebound in mortgage growth due to expected declines in mortgage rates, coupled with strong population growth and rising disposable incomes. This optimistic outlook suggests that higher home sales and prices may be on the horizon, potentially ending the current period of slow mortgage debt growth.

However, financial strain among homeowners is rising, with an increase in mortgage delinquency rates for the first time since the pandemic. The national delinquency rate rose to 0.17 percent in the last quarter of 2023 from 0.14 percent in the third quarter of 2022, indicating that some households are exhausting their financial buffers. CMHC’s deputy chief economist, Tania Bourassa-Ochoa, emphasizes the growing concern over household debt vulnerability, highlighting the need for vigilance among policymakers and the financial sector to mitigate risks to the financial industry and the broader economy.

Read the full article on: REAL ESTATE MAGAZINE