Canadian consumers slipping?
At some point the tide will go out on the Canadian housing market and that's when we will find out how leveraged borrowers are.
I was reading stories on the weekend about people who were continually re-mortgaging their homes during the boom to fund their lifestyles and racking up credit card debt in the process.
Now, the data is starting to show signs of trouble.
RBC credit analyst Vivek Selot detailed some findings in a note today:
- In one credit card program the 'roll' of early stage delinquencies to 60-89 day delinquencies hit the highest since 2008
- Delinquencies for another program are above the 10-year average
- Charge-offs remain near cyclical lows
"Cracks are starting to show in more and more places," he wrote.
From where I stand, the housing market locally appears to have far less excitement than a year ago with many more listings languishing on the market.
All this is far overshadowed by NAFTA for Canadian dollar traders and by the global/US growth as well but at some point it will be back in focus.
