Homebuyers undeterred by changes in mortgage landscape
By NextHome Staff
November 19, 2018
November 19, 2018
Though 2018 was not the best year for the mortgage landscape, Canadians remain hopeful about buying a home.A new survey from mortgage rate comparison site Ratehub.ca survey found that, despite recent regulatory changes and interest rate hikes,71 per cent of current non-owners plan to buy a home in the future. And 59 per cent of prospective first-time homebuyers plan to purchase a home within the next two years.This year saw a number of changes that affected the costs of ownership. In January, the mortgage stress test came into effect, which lowered affordability for Canadians with conventional mortgages by around 20 per cent, Ratehub.ca says. In addition, through 2018, the Bank of Canada announced three 25-basis-point interest rate hikes. (These increases are almost always immediately followed by mortgage rate hikes at Canada’s major banks.) Meanwhile, home prices in large cities continued to edge upwards.
Young Canadians most optimistic
Ratehub.ca, however, says younger Canadians remain the most optimistic about the prospect of homeownership, with Millennial and Generation Z Canadians leading the charge in homebuying intent. According to the survey, homeownership is a goal for:- 87 per cent of Generation Zers
- 81 per cent of Millennials
- 64 per cent of Generation Xers
- 54 per cent of Baby Boomers
- 44 per cent cited insufficient down payment funds
- 17 per cent cited housing market uncertainty
- 12 per cent said their household income was too low to enter the housing market
- 9 per cent preferred to maintain housing flexibility
- 6 per cent said their credit score was too low to qualify for a mortgage