According to a new report by Statistics Canada, household mortgage debt in June 2021 increased by over $23B from May, which is “the largest monthly increase on record.”
StatsCan noted that when compared with June 2020, mortgage borrowing was up 9.2%, which again “has a pace not seen since October 2008.” The first half of 2021, households have added $81.6 billion in mortgage debt, compared with $108.6 billion over all 12 months of 2020.
The housing market in Canada has been setting records month-over-month, with March setting a new all-time record to mark the highest level of activity of any month in history.
“There is normally a time lag between the sale of a home and the actual receipt of mortgage funds; however, borrowers may also be in the market for a new home, or otherwise be taking additional equity out of their home or consolidating debt when refinancing their existing mortgages,” says StatsCan.
The total credit liabilities of households reached $2,529.3 billion in June, a 1.1% increase from May. Real estate secured debt, composed of both mortgage debt and home equity lines of credit, increased by 1.3% to surpass $2.0 trillion for the first time.
StatCan points says the reasoning behind this surge is from the latest June 1st stress test for uninsured mortgages that states buyers rushed into the market before to its enforcement, and that “borrowers may also be in the market for a new home, or otherwise be taking additional equity out of their home or consolidating debt when refinancing their existing mortgages.”