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The Bottom Line:
Canadian household balance sheets demonstrated steady resilience through the opening quarter of 2026. Household net worth rose 1.3% to $18.6 trillion supported by gains in both financial and non-financial assets.
Real estate stabilization provided a welcome reversal after three consecutive quarters of decline, while equity gains remained positive despite experiencing the slowest quarterly growth in a year.
The household savings rate fell marginally, consistent with expectations that Canadians would draw on savings to maintain consumption amid energy cost pressures. RBC cardholder spending data preliminarily supports this hypothesis, though the full impact remains obscured by timing. Q2 data will offer a clearer picture as sustained energy price pressures and broader inflation are more fully reflected.
The details:
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Housing market weakness that characterized 2025 showed signs of stabilization in Q1, as the CREA MLS Home Price Index (NSA) posted gains (+1.3% q/q) following three consecutive quarters of declines. This reversal provides a welcome respite from the persistent drag on household wealth, though momentum remains fragile.
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Financial assets advanced 1.3%, with the S&P/TSX Composite Index gaining 3.3% during the quarter. Energy stocks contributed disproportionately to returns as elevated commodity prices bolstered sector valuations following geopolitical tensions and the energy price surge in late February.
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The household savings rate fell to 3.5% in Q1 2026 from 4.4% in Q4 2025 while currency and deposit growth moderated to 0.4% from 0.8% in the prior quarter. The modest savings drawdown aligns with expectations that households would tap savings to maintain consumption as energy prices climbed toward quarter-end.
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Household credit market debt expanded to $3.25 trillion at a measured 1.1% pace in Q1. Mortgage borrowing contributed the bulk of growth, though new originations remained restrained at $22.6 billion—the slowest pace since Q1 2024. This was more than offset by growth in non-mortgage debt.
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The debt service ratio ticked higher to 14.8% from 14.7%, as total debt payments rose to outpace income growth. The non-mortgage household debt service ratio continued to track well below pre-pandemic levels, providing additional flexibility for household borrowers.
About the author:
Rachel Battaglia is an Economist at RBC, providing forecasts for the Canadian provincial economies and analyzing key trends in housing and consumer spending.
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