Falling home prices are the main culprit, according to this story by the Calgary Herald.

In practical terms, the number of Alberta arrears are not overly dire. They’re only slightly above the 18-year average of 0.37%. However, in percentage-increase terms they’re worth a pause.

“Arrears” are basically mortgages that are over 90 days delinquent.  The numbers have increased in each of the past 15 months on record. Currently, however, only about 4 out of 1,000 AB mortgages are in trouble by the above definition. That compares to 3 out of 1,000 five months ago.

The Herald writes that scenarios like this are now quite common…

“in many cases, clients borrowed to purchase a second or third home to flip for easy profit, as many did before the market dipped in 2008. When that sale didn’t come, they were stuck with multiple mortgages and a shrinking pool of collateral.”

The flipping days are over for now. Calgary is dealing with $39 a barrel oil, the global economic illness we read about daily, and expectations of worsening home prices to come. It is therefore reasonable to expect Alberta arrears may continue rising, and lenders may continue tweaking (read “tightening”) their Alberta lending criteria. ____________________________________________________ Sidebar:  Here are more arrears stats by the CBA (Microsoft Excel Required). Note that Alberta isn’t the only province seeing rising delinquencies. Also remember that these figures are conservative because they include information only from large prime lenders.