The number of mortgage loans in Canada fell in the fourth quarter as housing activity cooled, but the value of all mortgages is still rising, according to a new report from the Canadian Mortgage and Housing Corporation (CMHC).
CMHC said that there were 223,000 new mortgage loans in the last three months of 2018, down by 4.8% from the same period in 2017.
"While indebtedness of Canadian households remains elevated, growth in the volume of mortgage activity slowed in the last quarter of 2018, partly reflecting lower housing market activity," said Geneviève Lapointe, senior market analyst at CHMC. "Despite high debt levels, delinquency rates remain low, and the number of highly indebted and more vulnerable consumers has decreased."
Borrowers with low credit scores accounted for less than 1% of new mortgage loans, CMHC said.
However, even as the number of loans fell, the average value of all mortgages in the country reached $209,570 in the fourth quarter, up by more than 3% from a year ago.
CMHC said that the national trend mirrors what happened in Toronto and Vancouver’s housing markets. While the number of transactions for home sales declined last year on higher borrowing costs, slower economic growth and recent mortgage regulations, the average home price in the country remains “historically elevated.”
"This explains, in part, why the average balance of new loans remains higher than in the overall mortgage market,” CMHC said.
In addition, CMHC said that mortgages accounted for about two-thirds of all debt held by Canadians, according to a CBC report.