Historically speaking, no single factor has influenced the rate of mortgage arrears (overdue payments) more than employment—not even rising interest rates.

This chart illustrates the relationship between Canadian employment and mortgage arrears quite nicely.  It comes from Will Dunning Economic Research.

Over the long haul, as employment goes up, arrears go down–and vice versa.  With strong employment, people can make their payments easier and more people qualify for mortgages.  It’s therefore no surprise that mortgage industry executives keep a close eye on the employment rate at all times.

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See Also:  Rising Rates And Mortgage Arrears

Last modified: April 28, 2014