Mortgage demand slows down amid rate hikes, slower growth

Mortgage demand slows down amid rate hikes, slower growth

Mortgage demand slows down amid rate hikes, slower growth

The overall number of new mortgages nationwide fell on an annual basis during the second quarter of the year, a development mainly attributed to the combined pressure of interest rate hikes along with slower income and population growth.

In its analysis of data from credit agency Equifax, the Canada Mortgage Housing Corp. stated that Q2 2018 had 205,000 new mortgages, which was 11.9% lower than the same quarter last year.

The Crown corporation added that the decline was notable considering the increases in the value of mortgages (up by 3.7% to an average of $205,980) and the overall number of active mortgages (up by 1.3% to approximately 6 million) nationwide during the same time frame.

Read more: Rate hikes will impede many Canadians’ home-buying plans

Borrowers in the 35-44 age bracket had the highest mortgage payments monthly, with an average of $1,380.

Canada’s total outstanding mortgage balance went up by 5% year-over-year, up to $1.23 trillion. According to the CMHC, mortgage loans now represent a 66.5% share of the nation’s total debt load

A low unemployment rate also helped in pulling down the number of mortgages left unpaid for 90 days or more. Delinquencies in this category declined by 10.4% year-over-year to settle at $2.4 billion during the second quarter.

 

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