The growth in Canadian mortgage debt slowed in the summer after Ottawa tightened up credit, new figures from the Canadian Mortgage and Housing Corp. show.

Estimated ranges for posted mortgage rates:

  1-year:  3.4 - 3.7%
5-year:  5.3 – 5.5%
  1-year:  3.4 - 3.8%
  5-year: 5.2 – 5.7%
(Source: CMHC)

The CMHC said Tuesday in its third quarter report that the refinancings it tracks fell by nearly 40 per cent at the beginning of the period, and was still down by 25 per cent compared to where it was before the government made the changes.

In March, the federal government reduced the maximum amortization period for new government-backed mortgages from 35 years to 30 and cut the amount Canadians can borrow in refinancing mortgages from 90 per cent to 85 per cent of the value of a home.

"The level of household debt remains a concern but there are encouraging signals," it said.

"There has been a significant deceleration in the growth of mortgage credit since March, particularly in recent months, impacting the growth rate of total household credit."

"Growth in personal loans, lines of credit and credit cards has levelled off in recent months."

The CMHC said that was followed by a drop of about 10 per cent in mortgage insurance applications, but the level has since recovered.

It predicted housing starts will be stable next year, with new homes this year totalling in a range of 170,900 to 199,900, and coming in at 161,650 to 206,350 in 2012.

The corporation estimated national sales of existing homes offered on the Multiple Listing Service, which were running at an annual rate of 460,000 in September after peaking at 472,140 in January, to end the year in a range from 423,600 to 470,100 and from 406,100 to 509,000 in 2012.

It forecast average national MLS prices of $353,100 to $375,300 this year and from $315,800 to $418,700 for 2012.

The CMHC said it saw little evidence of a price bubble.

"At the moment, there is little evidence of a significant over-valuation in the Canadian housing market overall, although some centres warrant close monitoring," it said.