Canadian mortgage delinquencies are fairly boring these days, until you drill down and look at the demographic shift. Canada Mortgage and Housing Corporation (CMHC) data shows mortgage delinquencies were flat in Q3 2020. When looking at their age breakdown though, it shows delinquencies on mortgages held by seniors is soaring. Balancing out the statistic is a lower rate of Millennials turning delinquent, making the stat appear like a wash.
Canadian Mortgage Delinquencies Are Flat
Canadian mortgage delinquencies haven’t moved much at the macro level. The rate of delinquencies is 0.30% for Q3 2020, flat from both the previous quarter and last year. It’s a little elevated since the 2018 lows. However, it’s generally stable, even considering the pandemic. Breaking these numbers down by age shows a slightly different trend.
Canadian Seniors With Delinquent Mortgages On The Rise
The mortgage delinquency rate for Canadian seniors is climbing, and is at the highest level in years. The rate reached 0.37% in Q3 2020, up 2.78% from the previous quarter. That represents an increase of 5.71% compared to the same quarter last year. Delinquencies for senior homeowners haven’t been this high since 2017. Interestingly, this is the only age group to see the rate of delinquency actually rise. The rate is also significantly higher than the national rate, showing overrepresentation for the demographic.
Canadian Mortgage Delinquencies By Age of Holder (Change)
The 12-month change in the rate of mortgage delinquencies by age of holder in Q3 2020.Source: CMHC, Better Dwelling.
Canadians Aged 45 to 64 See Flat Movement On Delinquencies
Canadian mortgage holders between 45 and 64 years of age were relatively stable. The rate of delinquencies for people aged 55 to 64 reached 0.28% in Q3, flat from the previous quarter, and a year before. Those between 45 and 54 reached a slightly higher 0.30%, flat over the same periods as well. The rate for these age brackets are off multi-year lows, but are generally stable. This demographic is just below the average.
Millennial Mortgages Make A Drop In Delinquencies
That leaves middle aged and younger households with the reduction in rate, to balance out rising levels in seniors. Mortgage holders between the age of 35 and 44 had a delinquency rate of 0.30% in Q3, flat from the previous quarter. This rate is actually 3.23% lower than the same quarter last year. This demographic is right at the national average.
Millennial homeowners aged 25 to 34 saw an even larger decline in the rate of delinquencies. That rate fell to 0.25% in Q3, flat from the previous quarter. Compared to the same quarter last year, it’s 7.14% lower. Still off of the multi-year low, but significantly below the national average.
On the surface delinquency rates seem like nothing is changing, but the demographic rotation is being ignored. Older homeowners are seeing their mortgages turn delinquent, despite programs designed to mitigate the issue. Younger borrowers, interesting enough, are turning delinquent at a lower rate. The decline in millennial homeowner delinquencies are likely due to higher prices requiring rock solid finances.
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