Canada's federal housing agency is expecting to see more homeowners fall behind in their mortgage payments in the western part of the country as a prolonged slump in oil prices hit household budgets and the once-soaring housing market. The Canada Mortgage and Housing Corp, which insures the bulk of home loans, said woes in the energy sector had not yet hit homeowners' ability to make their house payments, but signs of some distress would show up soon. “We have not seen a significant change in our arrears rate, but ... it's a little bit too soon for that to work its way through the system,” CMHC vice-president Steven Mennill said. “We are anticipating a slightly higher arrears rate in those provinces, should the economic weakness persist.” The country's housing market has boomed since 2009 but signs of weakness have shown up in regions outside the two largest markets, Toronto and Vancouver. Analysts have long warned the market could be a bubble but are divided over whether prudent lending standards and low interest rates will allow a soft landing, or a US-style crash. While national prices have risen 5.6 per cent in the past 12 months, the energy capital of Calgary has seen prices fall about 1 per cent since peaking in October last year, according to the Teranet-National Bank price index. The arrears rate in the province of Alberta was 0.28 per cent in the third quarter, up slightly from the start of the year but still below the national arrears rate of 0.35 per cent, the CHMC report showed. Mennill said the government insurer had also seen a modest reduction in new insurance volumes in the western Prairie provinces, which do not include British Columbia. He said that suggested home-buying was slowing but he believed new loans were less risky than in previous quarters. “If anything, we've seen an improvement in overall borrower quality and the risk profile of those loans – so volumes are slightly down but the actual quality of the business is slightly higher,” he said.