Mortgage debt increasing with housing prices

The report says the 90-day delinquency rate in Saskatchewan did fall slightly by 0.01 per cent year-over-year. TransUnion said credit card demand cont

The report says the 90-day delinquency rate in Saskatchewan did fall slightly by 0.01 per cent year-over-year.

TransUnion said credit card demand continued to decline with fewer people having access to a credit card this year across Canada.

In its latest quarterly Industry Insights Report released Tuesday, credit-monitoring agency TransUnion Canada said average mortgage-loan balances in Manitoba rose 3.1 per cent to $161,668 between the second quarter of last year and the second quarter of this year.

Rising house prices are driving mortgage debt levels higher in Manitoba, but serious mortgage delinquency rates are falling, according to a new report. “However, we did observe an easing of this trend in the second quarter from the previous quarter”, said Matt Fabian, the company’s director of research and analysis. Lenders continue to increase limits to existing customers, which is helping consumers meet their demand for higher borrowing levels.

The average new-mortgage balance in the first quarter of 2017 – the most recent reported data – was up eight per cent from the same time past year at $280,093, despite a 10 per cent decline in mortgage originations, or new home loans. Serious delinquency rates for mortgages fell by 4 basis points to 0.56 percent, the third consecutive quarter of declining delinquency. “We will continue to monitor these trends especially as interest rates rise, though we don’t anticipate a material impact on mortgages in the near term”.

“With the macroeconomic backdrop of a growing economy, low unemployment and strong consumer confidence, we observed robust growth in instalment and auto loans”, Fabian said.

He also said despite the drop in credit card originations and access, consumers are continuing to use the cards they have.

Despite overall growth, it’s clear past year mortgage rule change have had an impact on new mortgages.

That included a 12% drop in prime mortgages and a 5% decline for “super” prime consumers.

The Bank of Canada raised interest rates for the first time in almost seven years on Wednesday, raising concerns that highly-indebted consumers could struggle with making increased repayments.

Go to Source

COMMENTS