1 Trillion Dollars in Mortgages in Canada
The CAAMP (Canadian Association of Accredited Mortgage Professionals) put out their Fall Consumer Report and says that Canadians now hold over $1 Trillion in Mortgage debt. To be specific they said that:
As of August 2010, there was $1.01 trillion in outstanding residential mortgage credit
That is a big pile of debt to be holding, but it is well spread out.
A good thing to see is
The average mortgage interest rate for home owners’ mortgages is 4.22%, a drop
from 4.55% a year earlier.
So at least we are not holding this debt at a very high rate of interest.
And I did like reading:
Among home owners who have mortgages, the average amount of equity is about
$146,000, representing 50% of the average value of their homes ($291,000).
So we are close to having half the debt paid off on average too.
I would strongly urge everyone to have a look at this interesting report, just so you understand the scope of the Mortgage industry right now in Canada.
One last interesting quote about the value of all the property held with these loans:
The total value of owner-occupied housing in Canada is estimated at $2.91 trillion.
Mortgages on these homes total $820 billion, leaving $2.08 trillion in home owners’
equity. This equity is equal to 72% of the total value of the housing.
Wow! that is a dilly of a number isn’t it? Remember we are pretty small potatoes compared to our friends to the south as well.
Should We All Be Owning Homes?
There is an interesting debate, to be had. The Wall Street Journal dragged up an interesting article written 70 years ago, by Melchior Palyi which said not everyone should be a homeowner (at least in the U.S.).
The warnings included statements about if everyone owned homes, it would nail their feet to the floor and make them less mobile and worse, heavily loaded down with the costs of home ownership. This is an interesting take on the question of whether you should own a home or not, I know that once I moved into my first house, my ideas of migrating to better jobs in other places, dropped considerably.
The Journal contends that this chap predicted the U.S. housing bubble, not sure I completely buy that concept, but still an interesting take on the whole housing issue, and very topical given the CAAMP report that just came out as well.
Is having over a Trillion Dollars of Debt in the Canadian Economy a good thing? It would be much better if it was less, and if interest rates start ramping up, that debt will grow much faster too.