Highest mortgage debt growth in a decade according to CMHC

KAWARTHA LAKE – Record interest rates and strong housing market activity driven by a pandemic-fueled demand for more space, propelled residential mortgage debt growth during the first half of 2021 to levels not seen in a decade, according to Canada Mortgage and The Housing Corporation’s Annual Report (CMHC) Residential mortgage industry Report published today

The report provides an in-depth view of the residential mortgage market in Canada from mortgage origination to financing, covering insured and uninsured mortgages, and encompasses the activities of all types of mortgage lenders. It is based on data available at the end of the second quarter of 2021.

“We’re also seeing delinquent mortgages hit their lowest level in 30 years. Many borrowers have benefited from a mortgage deferral program offered by CMHC and lending institutions and have been able to resume their regular payments. In addition, increased consumer savings and growth in disposable income have contributed to the ability of Canadians to make payments on time. noted Tania Bourassa-Ochoa, CMHC, Senior Specialist, Housing Research

The MLS® Home Price Index (HPI) tracks price trends much more accurately than is possible using average or median price measures. The overall composite / single-family benchmark price in the City of Kawartha Lakes was $ 620,700 in September 2021, a substantial gain of 33.1% from September 2020 according to the Kawartha Lakes Real Estate Association.

The dollar value of all home sales in September 2021 was $ 85.9 million, down 4.2% from the same month in 2020. New listings in Kawartha Lakes were 5.1% lower than the five-year average and 9% lower than the ten-year average for the month of September.

Highlights of the report:

Mortgage lending trends

  • The mortgage debt service burden in Canada as a percentage of disposable income continued to increase in the first quarter of 2021, driven by growth in expected principal repayments, partly reflecting the resulting increase in mortgages. the rapid rise in house prices in 2020.
  • New uninsured mortgages grew 20% in volume, taking a growing share of the residential mortgage market. The most notable increase was the issuance of uninsured mortgages for the purchase of real estate, which more than doubled the amount issued in the same quarter in 2020.

Mortgage rate trends

  • The large discount between fixed and variable rates has led more borrowers to opt for variable rate mortgages. Over 40% of new mortgage balances issued in the second quarter of 2021 have variable rates.
  • New mortgage holders continued to switch to longer term mortgages to take advantage of historically low interest rates.

Mortgage Loan Insurance Trends

  • The Big 6 banks provided a greater share of newly extended mortgages in 2020 (68%) than in 2019 (67%).
  • The remaining fifth of new mortgages in 2020 were granted by non-bank lenders.

Trends in types of mortgage lenders

  • In 2019, from Canada The big six banks maintained their strong presence in the housing finance market, with a 67% market share of newly extended mortgages.
  • Mortgage finance companies (MFCs) hold 20% of insured mortgage space and credit unions represent 12%.

For more information, see the Residential mortgage industry Report as good as Residential Mortgage Industry Data Dashboard.

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John A. Bogar

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