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Thanks to pricing itself out of the market and tightening borrower criteria, Scotiabank's Canadian mortgage balances fell a couple of billion dollars in Q2 versus Q1. Negative growth, even if just one quarter, is a big deal for a Big 6 bank.

In its conference call, Scotiabank noted that:

From 2008 to 2021, Canada's household debt soared from 80% of GDP to 107%.

U.S. household debt-to-GDP slid from 100% to 75% in that same timeframe.

To belabour the obvious, Canada has a worsening debt problem. And that problem could theoretically come to a head if/when unemployment spikes.

Despite the high probability that a U.S. debt limit deal will be reached by the Treasury's June 1 deadline, traders took U.S. yields higher on Tuesday. Hawkish Fed chatter added further fuel to the gains.

All that U.S. drama dragged Canadian yields higher in sympathy. But Canadian yields were also playing catchup to U.S. rates, given our market was closed for Monday's holiday.

Investors get a bad rap.

In a new report released today, StatsCan says:

"While investors can provide needed rental stock, they have also been found to exacerbate house price volatility and can limit housing market access for first-time homebuyers."

Investors seldom get the credit they deserve for improving the country's housing stock (including renovating neglected properties), revitalizing neighborhoods (which can lead to community development), adding market liquidity and creating equity (retirement assets) for existing owners.

Instead, they're conveniently scapegoated for a housing supply shortage of the government's own making. If there were enough homes to go around—relative to Ottawa's sky-high immigration admissions—perhaps first-time homebuyers would enjoy better affordability, and prices would be far less volatile.

Of course, investors do temporarily distort market fundamentals at times, but that's only because imbalances between supply and demand allow the fundamentals to be distorted.

But hey, this is all a soapbox speech for a different day.

Here's what our statistical agency concluded about Canadian real estate investors, along with tips for mortgage originators at the end:

Rate-weary mortgagors have been waiting for this signal.

The Fed Chair has suddenly shifted his tone and now appears more willing to let high rates do their work, with potentially no further hikes...for now.

Here was Jerome Powell's money quote from Friday: