Thanks to ever-increasing interest rates and slow income and population growth, demand for new Canadian mortgages dropped in the second quarter of 2018, Canada Mortgage and Housing Corp. reports.
According to the federal housing agency, the value and number of active mortgages rose year-over-year during Q2, however, fewer new mortgages were opened during that period this year.
The report, which analyzed Equifax data, revealed the credit and mortgage trends of Canadians in Q2 2018.
Key Consumer Credit Trends
- Existing mortgage debt grew faster than the total remaining value of all major loans excluding mortgages
- New mortgages over $400,000 continued to trend higher, while Canadian mortgages with a value of $300,000 or less have steadily decreased
The CMHC noted that Q2 2018 saw just 205,000 new mortgages. Down 11.9 per cent year-over-year. On the flip side, active mortgage loans grew 1.3 per cent and the value of those loans grew 3.7 per cent to an average of $205,980.
As individual mortgage values go up, so too does the country’s total outstanding balance. Year-over-year, Canada’s total mortgage value is up 5 per cent, bringing it to a whopping $1.23 trillion.
The CMHC says with the national unemployment rate near a record low level, Canadians’ aren’t struggling to make regular mortgage payments.
In fact, the number of delinquent mortgages actually dropped 10.4 per cent year-over-year. The lowest it’s been since 2012.
The CMHC says lower delinquency rates and fewer customers with recent bankruptcy claims has resulted in more financial stability.
Delinquency rates improved across other credit lines too. Credit cards, LOCs and auto lines all decreased year-over-year. The largest decrease was for auto loans held by consumers without a mortgage.