11:06 AM EDT, 03/16/2026 (MT Newswires) -- TD Economics on Monday said while it noted Canadian household wealth has now increased for nine consecutive quarters, with financial assets once again doing most of the heavy lifting, it added with equity markets turning more volatile amid geopolitical tensions in the Middle East, this streak could be tested in Q1.

TD in looking at the key implications of Household Balance Sheet data for Q4 2025 noted United States equity markets are currently below their levels at the start of the year, while Canadian equities are only around 2% higher. At the same time, the housing outlook remains soft, with recent data pointing to a cooling market, said the bank.

The debt-to-income ratio has deteriorated as credit growth continued, while the debt-service ratio held steady, suggesting that household balance sheets are gradually weakening at the margin, said TD. Even so, both measures remain below their peaks in Q3 2022, implying that consumer spending should continue to expand, though likely at a muted pace in Q1, it added.

TD noted higher gasoline prices are just starting to weigh on household budgets. However, it added, the drag could become more pronounced if fuel prices remain elevated for an extended period.

TD noted Canadian household net worth, assets minus liabilities, rose by $230.2 billion, or 1.3% quarter over quarter, to $18.6 trillion in Q4, marking the ninth consecutive quarterly gain, said TD.

For 2025 as a whole, household wealth increased by more than $1 trillion, noted the bank.

Financial assets rose 2.5% quarter over quarter, driven by strong equity market performance in Canada and more modest gains in the United States. Residential real estate values declined by 0.4% quarter over quarter, reflecting a pullback in home prices.

Household financial liabilities increased by 1.0% quarter over quarter, a slower pace than in Q3 as borrowing eased, with the pace of non-mortgage debt moderating in Q4.

The household debt-to-income ratio rose to 177.2%, marking a fifth consecutive quarterly increase, as debt growth continued to outpace income.

The debt-service ratio, total household debt payments as a share of disposable income, was effectively unchanged at 14.6%.