The Canada Mortgage and Housing Corporation complex in Ottawa.Sean Kilpatrick/The Globe and Mail
Canada Mortgage and Housing Corp. said the total value of its mortgage insurance shrank in the second quarter as the federal government continues to foresee itself playing a smaller role in the country's housing market.
CMHC insured $11.78-billion in new mortgages for homeowners in the three months ending in June, down from $12.49-billion in the same period last year. The agency insured $3.2-billion worth of bulk portfolio insurance program, which allows lenders to insure large numbers of uninsured mortgages, more than double the volume from the second quarter last year, a spike the agency said was due to more lenders opting to insure more of their uninsured mortgages in the second quarter rather than toward the end of the year.
Overall CMHC says it now insures $534-billion worth of mortgages. That figure is down $17-billion from $551-billion last year. The federal housing agency has a legislated limit of $600-billion in mortgage insurance.
CMHC insures 41.2 per cent of all outstanding mortgages in Canada, down from 44.8 per cent in the same period last year.
Despite a sharp downturn in oil prices since last fall and fears over a Canadian recession this year, CMHC said claims on its mortgage insurance increased by just $1-million in the second quarter compared to the same period last year, to $88-million.
Nationally, the agency's loss ratio – the percentage of its total outstanding insured mortgages that are at least 90 days in arrears – was 0.34 per cent, up from 0.33 per cent a year earlier.
The average credit score for borrowers was 748 in the second quarter, up from 745 a year earlier, while the average value of an insured mortgage rose 2 per cent to $235,384.
Regionally, however, mortgages arrears were up for the year by more than a third in Newfoundland and Saskatchewan, two provinces whose housing markets have struggled this year amid falling commodity prices.
The percentage of CMHC-insured mortgages in arrears has risen slightly in Alberta this year, although it was lower than the same time last year. The arrears rate dropped in B.C. and Ontario, markets that have benefited from lower interest rates and a falling Canadian dollar.
Hikes to insurance premiums brought CMHC brought in an additional $22-million in revenue for the federal agency.
Editor's note: A previous version of this story said CMHC-insured mortgages in arrears fell slightly in Alberta. Corrected data provided by CMHC actually shows they have risen slightly.
Tamsin McMahon