A recent report by Canadian Mortgage Trends indicates that more Canadians are delaying home purchases due to increasing economic concerns, including rising fears of a recession.
According to BMO’s latest Real Financial Progress Index, a significant majority (74%) of Canadians are now worried about a potential recession, a notable increase from the previous month. This growing anxiety, coupled with worsening affordability, has led half of Canadians to believe that homeownership is less attainable than it was a year ago.
While a large proportion (67%) of potential buyers are waiting for interest rates to drop, a considerable 38% are hoping for rates of 3% or lower, which are significantly below current offerings. This sentiment is particularly strong in areas like British Columbia and Southern Ontario, where economists note a clear underlying weakness in the housing market as inventory builds and investors remain hesitant.
The survey highlights a shift in buyer psychology, with 56% of prospective buyers feeling they’ve missed their chance to buy. This feeling is even more pronounced among Millennials, with 66% believing their window to enter the market has closed. Consequently, only a small percentage (14%) plan to buy in 2025, while 24% have pushed their timelines to 2026 or later.
Financial assistance from family remains crucial for many, with 43% of homeowners reporting they couldn’t have bought their home without it. Additionally, shared ownership with non-romantic partners is gaining popularity, with 45% open to the idea.
Despite homeownership remaining a top life goal for 59% of Canadians, two-thirds feel less confident about achieving it compared to five years ago. This decline in confidence is particularly evident among younger Canadians, many of whom are considering relocating to another province or even country for affordability. Interestingly, 61% of Canadians, especially Boomers and Gen Xers, are content with renting.
In other news, Canada’s national mortgage arrears rate saw a slight increase in February, reaching 0.23% with over 11,000 mortgages three or more months past due. While modest, this continues an upward trend from the pandemic low. Saskatchewan, Manitoba, and Alberta show the highest arrears rates, while Quebec and British Columbia have the lowest.
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