CMHC releases results for second quarter of 2024

Ottawa, August 29, 2024

Canada Mortgage and Housing Corporation (CMHC) today released its Quarterly Financial Report showing a significant rise in demand over the last year for Multi-Unit Insurance products that support the construction of more purpose-built rentals, a key factor in tackling the country’s housing supply and affordability challenges.

As Canada’s only provider of mortgage loan insurance for multi-unit residential properties, CMHC is seeing continued strong growth in our multi-unit insurance products, in both insured units and dollars. Insured volumes totaled $31,175 million in the first half of 2024, up from $19,406 million during the same period last year – a 61% increase. Our insurance facilitates access to preferred interest rates, lowering borrowing costs for the construction, purchase and refinance of multi-unit residential properties, and also facilitates renewals throughout the life of the mortgage.

With continued growing demand for rental housing in Canada, CMHC anticipates a continued increase in demand for our multi-unit mortgage loan insurance. In addition to this, the Office of the Superintendent of Financial Institutions (OSFI), as a part of its annual risk outlook released on May 22, 2024, announced new capital requirements for multi-unit residential exposures that will be published in Q4 2024. The release of this new framework results in uncertainty as to the amount of capital we will be required to hold.

As a result of these two factors, we have decided to temporarily suspend our dividend to our shareholder, the Government of Canada, on a prospective basis. This temporary suspension represents $145 million for Q2, 2024. While our current capital position remains strong, the preservation of capital allows our multi-unit business to grow and respond to the increased need in the market for the supply of purpose-built rental housing.

Quote:

“It is encouraging to see continued increase in demand for our multi-unit insurance products which leads to increased rental housing supply. We remain committed to our important role of furthering and supporting the growth and sustainability of purpose-built rental supply in Canada.”
— Michel Tremblay, Chief Financial Officer and Senior Vice-President, Corporate Services

Additional highlights for the three-month period ending June 30, 2024:

Economic conditions continue to have a significant impact on our financial results. The sustained high interest environment from recent interest rate increases has led to continued higher investment and interest income in the first half of 2024.
Arrears for mortgages insured by CMHC remain low at 0.28%, resulting in low levels of claims paid. The arrears rate decreased slightly, down from 0.29% in the same quarter last year, and remains below historical trends.
Transactional homeowner unit volumes increased by 7% to 14,743 compared to 13,741 in Q2 2023.
We guaranteed $52 billion in new securities, an increase from $47 billion in Q2 2023, resulting from an increase in our annual issuance limits for both our NHA MBS and CMB products.
In the housing market, seasonally adjusted and annualized rate (SAAR) MLS® sales in the first half of 2024 marginally edged up to approximately 461,000 units, a 5% increase compared to the same period in 2023.
With an increase in listings, the average MLS® price in the first half of 2024 was approximately $674,000, roughly equal to the price level observed during the same six-month period in 2023. Canada’s average MLS® price increased this quarter compared to $668,559 in the first three months of 2024.
The new home construction market began 2024 strongly, marking one of its strongest first quarters on record. Housing starts reached 252,124 SAAR units, up 15% from the first quarter of 2023, and exceeding the average level of 2023.
High home prices combined with mortgage renewals at higher rates continue to challenge affordable homeownership. Housing starts at an annual pace of approximately 247,000 units in the first half of 2024 were 6% above the same period in 2023, but still fell short of the levels needed to achieve affordability.

Q2 Highlights	Three months ended 30 June 2024	Year-to-date June 30, 2024
Net income ($M)	364	738
Government funding ($M)	708	2,708
New securities guaranteed ($B)	52	104
Insured volumes (units): Transactional homeowner insurance	14,743	22,038
Insured volumes (units): Portfolio insurance	2,685	4,676
Insured volumes (units): Multi-unit residential insurance	77,922	141,178

Capital management	As at 30 June 2024
Total Mortgage Insurance capital ($B)	10.8
Mortgage Insurance capital available to minimum capital required (%)	186%
Total Mortgage Funding capital available ($B)	1.5
Economic capital available to capital required (Mortgage Funding) (%)	111%
Insurance-in-force ($B)	424
Guarantees-in-force ($B)	528
Canadian residential mortgages with CMHC insurance coverage (%)	19.5%
National arrears rate for CMHC-insured mortgages (%)	0.28%

The full Quarterly Financial Report is available online.

CMHC plays a critical role as a national convenor to promote stability and sustainability in Canada’s housing finance system. Our mortgage insurance products support access to home ownership and the creation and maintenance of rental supply. Our research and data help inform housing policy. By facilitating cooperation between all levels of government, private and non-profit sectors, we contribute to advancing housing affordability, equity, and climate compatibility. And we actively support the Government of Canada in delivering on its commitment to make housing more affordable.