Economic factors such as employment numbers and housing prices variances are having a pronounced impact on mortgage delinquencies in the Prairies.
This is according to the CMHC’s latest Mortgage and Consumer Credit Trends report, which covered Q3 2018.
In the Calgary and Edmonton CMAs, delinquency rates (at an average of 0.32% and a high of 0.57%, respectively) were kept to a manageable level by employment growth.
A similar effect was more apparent in Winnipeg, where steady economic and jobs growth have kept delinquencies lower (with an average of 0.25%, lower than the nationwide rate of 0.28%) compared to other markets in the Prairie region.
Meanwhile, Regina’s delinquency rate was greater than expected (with a high of 0.9%) due to mounting unemployment, coupled with higher mortgage rates and multiple pressures on housing prices.
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The proportion of consumers with mortgages went up in Edmonton, fell in Regina, and remained stable in Calgary, Saskatoon, and Winnipeg, the study added.
The highest share was in Calgary, with 33% of consumers holding mortgages and a 72.9% home ownership rate. The lowest was Winnipeg’s 29% mortgage-holding rate, with a similarly lower-end 67.3% of households having ownership.
Fortunately, Equifax data for Q3 2018 showed that average credit scores in the major Prairie region CMAs stood at excellent levels, with the highest at Winnipeg (score of 766) and the lowest at Regina (still a healthy score of 759).