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Evolving market conditions, including higher interest rates, have had an impact on second quarter results for Canada Mortgage and Housing Corporation (CMHC), as indicated in the Q2 2022 financial report released today.
In Q2 of 2022, unit volumes have decreased for transactional homeowner and multi-unit products, as compared to the same quarter last year as the market is adjusting to higher interest rates and continued elevated house prices. House prices are also contributing to higher insured loan amounts than prior year and lower insurance provisions.
Paid claims remain low for all products and the national mortgage arrears rate decreased to 0.25%, from 0.28% at December 31, 2021.
“Increased volatility due to inflation and interest rates are impacting interest-sensitive assets and liabilities,” said Michel Tremblay, CMHC’s Chief Financial Officer and Senior Vice-President, Corporate Services. “We continue to monitor market changes and assess any potential impact on our current and projected financial results.”
Additional quarterly report highlights for three-month period ending June 30, 2022:
- Our net income for Q2 was $431 million, down from $460 million in the same quarter last year when insurance provisions initially set-up as part of the COVID-19 pandemic, were released due to improving economic conditions.
- This was the first full quarter for our new multi-unit Mortgage Loan Insurance product, MLI Select, launched in March. We insured 7,823 units of MLI Select during Q2. MLI Select incentivizes the preservation and creation of rental supply and helps address the need for affordable, accessible and climate compatible housing.
- We launched Canada Greener Homes Loan (CGHL) in June 2022. With $4.4 billion over five years, CGHL will help up to 200,000 homeowners complete deep home retrofits through interest-free loans of up to $40,000.
- We continue to deliver the National Housing Strategy (NHS), a 10-year initiative with investments of more than $72 billion giving more Canadians a place to call home. The NHS covers the entire housing continuum, from shelters and transitional housing to community and affordable housing, to market rental and homeownership. We report progress on the achievement of NHS targets quarterly at www.placetocallhome.ca
| Q2 Highlights | Three months ended 30 June 2022 |
|---|---|
| Net income ($M) | 431 |
| Government funding ($M) | 489 |
| New securities guaranteed ($B) | 44 |
| Insured volumes (units): Transactional homeowner insurance | 21,743 |
| Insured volumes (units): Portfolio insurance | 8,497 |
| Insured volumes (units): Multi-unit residential insurance | 45,050 |
| Capital management | As at 30 June 2022 |
|---|---|
| Total Mortgage Insurance capital ($B) | 9.9 |
| Mortgage Insurance capital available to minimum capital required (%) | 192% |
| Total Mortgage Funding capital available ($B) | 1.3 |
| Mortgage Funding capital available to capital required (%) | 146% |
| Insurance-in-force ($B) | 397 |
| Canadian residential mortgages with CMHC insurance coverage (%) | 19.9% |
| National mortgage arrears rate (%) | 0.25% |
The full Quarterly Financial Report is available online.
CMHC supports the housing market and financial system stability by providing support for Canadians in housing need, and by offering housing research and advice to all orders of Canadian government, consumers and the housing industry. For more information, follow us on Twitter, YouTube, LinkedIn, Facebook and Instagram.
For information on this release:
CMHC Media Relations
media@cmhc-schl.gc.ca
