A new report from Canadian Mortgage and Housing Corporation (CMHC) shows that the number of mortgage loans in Canada grew at a slower pace in the fourth quarter as housing activity cooled across the country.
However, despite the slowdown, CMHC said that the value of all mortgages is still rising in Canada. In total, there were 223,000 new mortgage loans issued in the last three months of 2018, which is 4.8% lower than the same period a year ago, according to CMHC.
"While indebtedness of Canadian households remains elevated, growth in the volume of mortgage activity slowed in the last quarter of 2018, partly reflecting lower housing market activity," said CHMC in the news release. "Despite high debt levels, delinquency rates remain low and the number of highly indebted and more vulnerable consumers has decreased."
Borrowers with a low credit score accounted for less than 1% of new mortgage loans, the CMHC added. But, even as the number of loans fell, the average value of all mortgages in Canada reached $209,570 in the fourth quarter, which is more than 3% higher than a year ago.
While the number of transactions for home sales fell last year on higher borrowing costs, slower economic growth and recent mortgage regulations, the average house price in Canada is still "historically elevated," CMHC said. "This explains, in part, why the average balance of new loans remains higher than in the overall mortgage market."
Mortgages accounted for two-thirds of all debt held by Canadians at the end of 2018, according to the government agency that is based in Ottawa.
