Canadian Mortgage Debt Reaches Three Year High in May
The Canadian Mortgage and Housing Corporation is reporting that in May, Canadian mortgage debt rose 6% year-over-year, the fastest annual rate since July 2017. The increase the results of an increase in property sales and record levels of mortgage payment deferrals due to the COVID-19 pandemic. The CMHC has been warning about excessive household borrowing as it forecast a drop of as much as 18% in home prices despite a recent recovery in the market. In July, it tightened underwriting standards for riskier borrowers. The top six banks reported Canadian mortgage deferrals of 13.5% in the three months through July, from a peak of 16% at the end of the previous quarter.
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