As central bankers raise interest rates in hopes of cooling inflation, we are now starting to see of the effects of higher borrowing costs on household budgets and spending patterns.
It also has kicked a dint in our wealth as the average home price in the country fell last month for the first time in three years.
Canadians are borrowing more in the face of increased debt service costs. That is the finding of a report from Statistics Canada on the state of household finances.
This suggests that as the cost of mortgage payments rise, we are borrowing in other places to maintain our lifestyle or to cover all the other living costs.
However, we are changing our approach on some fronts such as mortgages. The pace of new mortgage acquisition is slowing for the first time in months as Canadians retrench a bit.
On the other side of the ledger, though, the pace of growth in credit card debt is increasing, which is a signal that we may be charging a few things because mortgage payments are eating up more of our disposable income.
