The costs of owning a home in Canada have become more expensive for the first time in six quarters and affordability will continue to deteriorate in the coming months, Royal Bank of Canada’s quarterly housing report showed yesterday. Costs increased across all housing segments in the third quarter.

Rising house prices and small increases in mortgage rates were the key reasons, the bank said.

The housing market faces “obstacles” in the future due to a weak labour market and rising mortgage costs, it said.

The chart says it all. Mortgages in arrears are still low in Canada, but the number is up considerably from last year.

Nowhere is the spike as startling as in Alberta, where the percentage has more than doubled. The cause dates to a red-hot economy in recent years, which sent house prices soaring as newcomers flocked from across Canada and around the world. The housing market became extremely tight. People became over-leveraged.

“With good times rolling at the time, lots of households just took on big mortgages. And now, when you look at the unemployment rate there, it’s shot up. With big mortgages and the sharp housing-price correction … this is a pretty bad equation,” RBC senior economist Robert Hogue said.

“They got caught by the frenzy in the market and ended up, in retrospect, being overextended.”

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