The Bank of Canada is out with its latest Financial Stability report. It's mostly a risk-highlighting exercise that has little impact on financial markets but I do want to highlight one part of the report because I believe that housing market risks are mounting and prices are falling.
Among households with a mortgage, 60% are facing renewal this year or in 2026. Most of those renewing will see their payments rise because they took out their mortgage during the pandemic when rates were very low. But the average increase will be smaller than what we expected a year ago. Still, if a large economic shock causes job losses, it will be harder for some households to keep up with their debt payments. A prolonged trade war may be that shock. It would cause demand for Canadian exports to fall and disrupt supply chains, threatening jobs and incomes. Workers in trade-dependent industries could find it particularly difficult to continue managing their debt.These numbers were released from the Toronto Real Estate Board yesterday and show sales down 23% y/y with listings up 54% y/y. The condo market is particularly dire but detached homes are cracking as well.
This article was written by Adam Button at www.forexlive.com. Read More Details
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