Time for your weekly cheat sheet on this week’s most important stories.
Canadian Real Estate
Canadians may have had their fill on real estate for the next few years. The balance of mortgage debt reached $1.53 trillion in September, up $3.34 billion from the month before. This represents an increase of 3.4% from last year, making it the slowest growth since July 2001. Unfortunately, a little trend analysis shows this number is also heading lower.
Reverse mortgages are likely the fastest growing segment of debt in the country. The balance of reverse mortgages stood at $3.03 billion in August, up 42.32% from the same month last year. That’s right, seniors are reversing mortgaging their homes at a double digit pace.
Interesting times are ahead for Canadians, as household credit growth tapers to the lowest levels in decades. The balance of household debt reached $2.15 trillion in September, up 3;61% higher than last year. While that sounds like baller growth, it’s actually the slowest pace of growth since 1983. That’s right, most first-time buyers weren’t even born the last time it was this slow.
A branch of the world’s largest central bank thinks Canadians may be paying a touch too much for that house still. The Dallas Fed, a branch of the US Federal Reserve, published their quarterly exuberance indicators for Q2 2018. The indicators shows Canadian prices are coming closer to reality, but are still pretty far. We know, it’s just the US Federal Reserve. It’s not your real estate agent that offered to pull some strings to get you a mortgage you can’t actually afford. But still, they do have a little street cred.
Canadians are shying away from insured mortgages, a sign of less high-ratio mortgages. The balance of insured mortgages reached $508.82 billion in September, down $13.6 billion from last year. That works out to an 8.52% decline, when compared to the same month last year. This is the biggest drop… ever. Literally, insured mortgages have never seen such a large annual decline.
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