As anybody who was around for the housing collapse will remember, nothing bursts a bubble in home prices faster than rising mortgage rates. And while US home prices have surpassed their pre-crisis peak, Canadian home prices have risen much more quickly than home prices in the US, and what's more, they didn't see nearly as large of a pullback during the crisis.

Instead, they've ridden a wave of hot foreign money to all time highs...

...in the process, leaving housing and construction as one of the focal points of the Canadian economy.

But in the latest sign that home prices could be due for a pullback, Royal Bank of Canada and Toronto-Dominion Bank reported that mortgage lending fell sharply during the fiscal second quarter, compared with a year earlier.

However, a spike in business lending has helped soften the blow to the bank's bottom line.

But yields on 10-year Canadian bonds have moved higher since the end of last quarter, meaning mortgages would be more expensive now than then.

One analyst said it's good that the banks are finding more business customers, because with the Bank of Canada and the Federal Reserve raising interest rates, Canadian banks shouldn't rely on growth from the consumer end.

"It’s really a favorable macro-economic environment in Canada and the U.S. right now that’s driving really healthy business demand," Shannon Stemm, an analyst with Edward Jones & Co., said in a phone interview. "It’s a smart pivot for some of these banks to really focus in on their efforts on the business side when you think about the looming risks and the fact that they’re potentially not getting credit for the growth on the consumer side."

Other Canadian banks, including the Canadian Imperial Bank of Commerce, which saw its slowest mortgage loan growth in three years during the last quarter, are bracing for consumer loans to shrink.

And while this could be the start of a badly needed deleveraging, it's equally likely that this could snowball into a debt crisis. The Bank of Canada has recognized these threats, with Stephen Poloz citing housing prices and personal debts as threats to the economy. But that hasn't stopped him from hiking rates.