Canadian household debt has shown relatively muted increases despite growth in the mortgage segment, according to data from the central bank.
Household credit stood at $2.29 trillion in May, which was essentially flat from the month prior and 3.6% higher annually. The year-over-year pace was the slowest since June 2019, Better Dwelling reported.
This accompanied the new record high of $1.68 trillion in overall mortgage credit, increasing by 0.6% monthly and 6% from May 2019 – the highest annual increase since July 2017.
“Growth over the past few months has been soaring, almost making a vertical print,” Better Dwelling said. “The annualized 3-month rate of growth reached 8.2% in May, the highest level since 2010.”
Federal fiscal support and payment deferrals – which exceeded 743,000 in May – are helping stabilize household finances in the interim.
Figures from the Office of the Superintendent of Bankruptcy Canada showed that the national market saw a significant decline in insolvencies as a result: OSB’s latest figures indicated that there were 6,111 insolvency filings in May, falling by 8.8% monthly and 51% year-over-year. The agency said that this was the largest annual decrease since 1988.