Spring Is Here

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Spring seems to have arrived early there is a mood of genuine optimism. Vaccines are rolling-out, case numbers are dropping and the economic toll has not been as harsh as originally feared.

There has been improvement in employment numbers in February. Many of those jobs are in sectors that were hardest hit by pandemic lockdowns.

The housing market is fairing much better than expected. Home sales and home prices have been shattering records. Housing starts are up. Moreover, homebuyers appear to be on very sound financial footing and they also appear to be focusing on their mortgages.

In its latest Industry Insights Report, credit tracking firm TransUnion indicates many consumers are deleveraging. New originations of unsecured credit are mostly down. Personal lines of credit plunged 37%, credit cards dropped 35% and personal loans were 18% lower in the 4th quarter, on a year-over-year basis. At the same time mortgage credit grew 5.6%, while the average balance of mortgage loans outstanding rose 5.7% to $293,000.

Further, TransUnion data shows delinquency rates dropped compared to a year earlier, despite the winding down of payment deferral programs. Non-mortgage delinquencies fell more than 28% y-o-y.

The Canadian Bankers Association reports just 0.22% of residential mortgages were in arrears in Q4 of 2020.

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