* Carney says household debt accumulation may be slowing
Sees some adjustment in housing market
* Repeats that rate hikes will likely be needed over time
OTTAWA, Oct 30 (Reuters) - There are signs that Canada's soaring household debt and its heated housing market - two of the biggest headaches for the country's policymakers - are decelerating, Bank of Canada Governor Mark Carney said on Tuesday.
Speaking to legislators, Carney said there have been ``mixed signals'' on the issue of household debt in Canada since several moves were made by the federal government and its agencies. Among them, the government tightened mortgage rules, the financial regulator introduced new mortgage lending guidelines, and the central bank hinted at higher interest rates to come.
``And I say that in a positive sense ... there are some signs that accumulation of household debt is slowing,'' Carney said in response to a question from a member of the House of Commons Standing Committee on Finance.
``So the pace is slowing, it's still accumulating, and that some adjustment appears to be under way in the housing market. This requires continued vigilance by all parties and we intend to play our part in that,'' he said.
Canadian housing prices fell during the global recession, but the market bounced back stronger than before as the economy recovered faster than those of some other major countries.
Low interest rates spurred heavy borrowing as home prices rose, pushing the household debt-to-income ratio to levels seen in the United States before its housing market crash.
Carney said the government's tighter mortgage rules are just starting to be felt in the housing market and that more observation is needed before deciding whether to take further action.
However, the central bank has begun to lay the groundwork in recent statements for the potential use of rate hikes to address the housing and debt problems, something its inflation-targeting mandate allows it to do under extreme circumstances.
In his prepared remarks to the committee, Carney said that he may need to raise interest rates over time, repeating that the bank remains hawkish, although slightly less so than in previous months.
The Bank of Canada is the only central bank in major industrialized economies to be talking about rate hikes as it cites modest but steady economic growth.
It is expected to begin raising rates in the fourth quarter of 2013, according to the median forecast of Canada's primary securities dealers surveyed last week.