MNI: Canadian Mortgage Growth Slows To Fresh 2001 Low

Canadian mortgage lending growth slid to the slowest since 2001 in July, reflecting the central bank's tightening campaign to tackle stubborn inflation.

Household mortgage lending rose 3.4% from a year ago according to Statistics Canada data released Tuesday, from a pace of 3.8% in June. The pace of lending was 3.5% in May 2001 and earlier that year it slowed to 2.7%, the lowest in StatsCan data back to 1991 for year-over-year comparisons.

Lending has slowed since May of last year, when the pace was 10.4%. The Bank of Canada began a series of eight interest-rate hikes in March of last year, including a shock 100bp move last July. Governor Tiff Macklem signaled a pause early this year before returning with hikes in June and July to the highest since 2001 at 5% and has said he may need to to more with persistent upside inflation risks.

The mortgage data by itself backs up Macklem's view that tighter monetary policy is working but perhaps with a longer-than-usual lag. Consumers are feeling the pinch of higher interest costs, which StatsCan said Tuesday are up a record 31% from a year earlier. Other housing market data still suggests pent-up demand.