Jobs vs Mortgage Arrears

The other day we commented on Mortgage Arrears, and although the Canadian market has seen an increase in mortgages that are in arrears during the past year, in absolute terms, only a very small portion (less then 0.5%) of Canadian mortgages are in arrears.

Chart Source:

There have been accusations in the marketplace that the historically low interest rates we have today are the cause of this problem, but Canadian Mortgage Trends recently uncovered another correlation that we think is equally to blame.

The chart to the right clearly shows the relationship between employment and the mortgage arrears rate, implying that as the economy continues to improve, job creation will also help to relieve the rate of mortgage arrears.

We continue to believe that the recent rule changes announced by the Government of Canada are prudent, and that low interest rates (when applied wisely) should be considered a positive in the context of the Canadian Mortgage market, not a negative!

One thought on “Jobs vs Mortgage Arrears

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