Categories for Industry Reports

Reminder to Politicians: Fuel Supply, Not Demand

As Canada’s federal election approaches, all the major parties are in vote-buying mode. The carrot they’re dangling in front of young homebuyers these days is buying power (more of it). That’s their “solution” to a problem they can’t quickly fix: high home prices. But the International Monetary Fund (IMF) is calling them out. The IMF, which is notorious for its...

Your Future Home Price Hinges on Public Perception

If you’re a homeowner, you want your property value to escalate over time. But market fundamentals—those economic factors that drive supply and demand—aren’t alone in determining your home’s worth. There’s something else that can be just as important: what your neighbours and people you know think prices will do. Price Expectations Matter (a lot) Research from Marcato and Nanda (2014) confirmed...

An Avalanche of New Mortgage Data

Here are seven things you may not know about Canada’s mortgage market. The source: CMHC’s insightful new Residential Mortgage Industry Report. 1) Variable Rates Looked Good (Keyword Being “Looked”) Almost 3 in 10 borrowers (29%) went variable in the first quarter. That’s 12 percentage points higher than two years prior. And that’s despite the historically narrow gap between fixed and variable...

You’re More Likely to Miss a Mortgage Payment if…

…You’re older, a lone-parent, making a modest income and living in the Prairies. That’s a sampling of insight from this new StatsCan study. Newer lenders could find this report interesting, given they always want to know who’s most likely to miss a mortgage payment. StatsCan’s research also downplays the highly publicized “debt-to-income ratio,” which makes news headlines every quarter. The agency writes...

Financial Optimism Linked to Mortgage Size

Think you’re going to be materially better off in the next two years? Odds are, you’ll get a bigger mortgage than someone who doesn’t. That’s StatsCan’s finding in this just-released study. “Families with positive expectations about their financial situation…held about $27,900 more in mortgage debt than other comparable families during the period from 1999 to 2016,” StatsCan said. That’s like a 38% bigger mortgage. The more...

HELOC Risk is Rising, Suggests the FCAC: New Stats

Most consumers are underinformed about HELOCs. 27% of HELOC holders are only making interest-only payments most/all of the time. Too many HELOC holders may be using them to overspend. Those were key findings from today’s Financial Consumer Agency of Canada (FCAC) report on HELOCs. HELOCs have been the single-biggest contributor to rising non-mortgage household debt over the past 15 years—”more than...

Home Un-Affordability: New Insights

RBC released its quarterly housing affordability report last week. Once again, it overstated mortgage un-affordability relative to prior decades (as previously noted). But it did have some points worth pondering. Among them: “Mortgage rates increased for a fifth straight quarter and accounted for the entire” drop in [RBC’s] affordability measure, the bank said. With rate-hike expectations dropping like a stone, our sense...

Watch the Bouncing Consumer Debt Ball

Canada’s debt situation appears to be getting better…if you just look at mortgages. But something sinister lurks beneath the surface. And it’s made of plastic. Indebtedness has been outgrowing incomes in this country, despite stringent new mortgage restrictions. Canadians now owe $1.78 in credit market debt for every dollar of household disposable income, just under the record high. And we keep...

New Bank of Canada Data on Mortgage Risk

Stricter mortgage rules are working, suggests the Bank of Canada in this report today. Now if only we could take that report at face value. New Stats on Mortgagor Debt Loads If the government wanted to slow the market, it did. As of the second quarter, the number of new low-ratio mortgages fell 15% year-over-year after the feds implemented the...

HELOCs Under the Microscope Again

HELOCs have been getting a bad rap ever since the FCAC proclaimed in 2017 that “home equity lines of credit may put consumers at risk.” Bank of Canada Governor Stephen Poloz then followed soon after by including HELOCs in a speech about what keeps him up at night. Policy-makers’ concern is that HELOC rates are rising and people are using them...