Households underneath 35 have been the one age group to constantly decrease their mortgage debt all through 2024, in response to new Statistics Canada information. Their common balances dropped 4.7% year-over-year in This autumn, extending a pattern that started in late 2022.
It might appear counterintuitive that youthful households are decreasing their mortgage debt, however StatCan says the explanations for this pattern range.
“Households within the youngest age group could also be decreasing their mortgage balances for varied causes,” the company famous, comparable to “turning away from the housing market because of affordability considerations, whereas current owners who bought a house when rates of interest have been a lot decrease from 2020 to 2022 could also be paying off their current mortgage debt balances or transferring into extra reasonably priced lodging.”
In some circumstances, youthful Canadians are additionally getting assist from household to handle the price of residing and scale back their debt.
In distinction, mortgage debt rose 7.7% amongst households aged 55–64 and eight.3% for these over 65. StatCan notes older owners could also be borrowing for funding properties, serving to youthful family members with down funds, or funding different monetary objectives.
Change in common family mortgage debt by age group
Decrease charges shift the stability
The information present how Canada’s falling rate of interest atmosphere in 2024 reshaped family funds. The Financial institution of Canada lower its coverage fee from a peak of 5.00% to three.25% by December, serving to to sluggish the expansion in curiosity funds and ease debt servicing burdens.
Family curiosity funds rose by 9.0% in 2024—down sharply from 52.8% the yr prior. For the primary time in three years, the interest-only debt service ratio held regular throughout all age teams, together with youthful debtors, who are usually extra indebted.
Debt-to-income ratios additionally improved. The under-35 cohort noticed their ratio fall to 160.8%, down from 175.3%, whereas the 35–44 group nonetheless held the very best debt load relative to earnings at 238.2%.
Wealth hole stabilizes as lower-income households catch a break
Decrease rates of interest, rebounding house costs and slowing inflation helped a few of Canada’s least rich households construct internet value once more.
Households within the backside 40% of the wealth distribution elevated their internet value by 8.8% in This autumn 2024—quicker than another group—because of positive aspects in each actual property values (+4.5%) and monetary property (+9.2%). In lots of circumstances, the worth of actual property owned rose greater than the rise in mortgage debt, reversing a pattern seen through the peak of fee hikes in 2022–2023.
The wealthiest 20% of households, by comparability, noticed no development in actual property values and relied solely on monetary markets for his or her 9.9% net-worth acquire.
Whereas the general wealth hole stays vast, with the highest 20% holding almost 65% of internet value, it didn’t widen in 2024, a notable shift from prior years.
Revenue inequality continues to rise—however extra slowly
StatCan additionally reported that Canada’s earnings hole widened for the fourth straight yr, pushed by sturdy funding positive aspects for prime earners. Disposable earnings rose 5.9% for the highest 20%, in comparison with simply 3.6% for the underside 20%, who have been the one group to see wage losses.
Nonetheless, the speed of inequality development has slowed. The earnings hole rose simply 0.5 proportion factors in 2024, in comparison with two factors in each 2022 and 2023.
Center-income households fared finest in lots of respects, with earnings positive aspects of 5.4%—pushed by sturdy wage development. In addition they improved their financial savings place by spending far lower than they earned.
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disposable earnings Editor’s decide family internet value rates of interest mortgage debt internet value statcan statistics canada
Final modified: April 14, 2025
