02:45 PM EDT, 05/29/2024 (MT Newswires) -- Canada Mortgage and Housing Corp. says the country's total residential mortgage debt totalled $2.16 trillion as of February this year, up 3.4% year-over-year and representing the slowest growth in 23 years, The Canadian Press is reporting Wednesday.

It noted the federal housing agency said in a new report that higher mortgage costs and uncertainty around the Bank of Canada lowering its key interest rate led to softer home sales and prices across many regions in the second half of 2023.

However, it said the slowdown in mortgage growth could be short-lived. The agency expects the rate of growth for mortgage debt to increase amid forecasts of higher home sales and prices in the coming years. It said an anticipated decline in mortgage rates, along with population growth and increases in real disposable incomes, will likely fuel the turnaround.

"In a context where debt levels have never been so elevated and households are showing increasing warning signs of financial struggle, household debt vulnerability is becoming a primary area of concern," said CMHC deputy chief economist Tania Bourassa-Ochoa in a press release.

"As homeowners find it more difficult to manage their monthly budgets, policymakers and the financial sector are on high alert when considering risks to the financial industry and the economy."

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