Among Canadians aged 18-24, two thirds (64%) of them plan to make the move to home ownership, with 63% looking to buy in the next five years, but nearly half (44% ) say they have not started to save. The down payment is the biggest obstacle; however, rising prices is seen as having an impact on their ability to buy.
A majority (56%) of Canadians are sympathetic and say something should be done to help the younger generation enter the housing market. Seventy-seven per cent believe that buying a home is more difficult for young Canadians today than it was for previous generations.
Here are the key findings from the CIBC poll about millennials and home ownership:
- 64 % of Canadians aged 18–34 say that their future plans include buying a home. Among them: 63% plan to do so within the next five years, and 44% have not started to save yet for their down payment.
- 54 % of millennials planning to buy a home say that saving enough for the required down payment is the biggest obstacle to home ownership. Other roadblocks include: Job security and earning enough to afford mortgage payments (53%) and rising real estate prices (46%).
- 56 % of Canadians say something should be done to help young Canadians get into the housing market.
- 77 % of Canadians say buying a home today is more difficult for young Canadians than it was for previous generations
Although it may not be easy to get a mortgage, it is doable. Working with a mortgage broker, who can help map out a strategy, is a key step to make the dream of home ownership a reality. In fact, the result of a ScotiaBank poll found that 98% of Canadian now rely on the Internet for information, yet 70% still look to advisors for their mortgage advice. This is likely due to sheer volume of information available online. The bank also predicts that by 2020, less than 1 in 10 financial transactions will occur in branches, which means that online transactions will increase.
So what does this mean for mortgage brokers and consumers? It’s actually good news for consumers. As competition increases, mortgage products may become more tailored with more options available. Competition is a good thing because it gives you choice. Brokers can help facilitate that choice.
In the mortgage industry, with historically low interest rates, it’s easy to shop the market to find a low advertised rate, whether from your local bank or from your mortgage broker. However, mortgages are not as simple as some make them out to be, especially when rate is all that is considered.
It’s important that home buyers educate themselves about mortgages including the following areas: pre-payment terms, penalties, fixed vs. variable, open vs. closed, etc. Each situation is as unique as each borrower and each needs a unique strategy.
Again, the sheer volume of information online can be overwhelming. While getting informed through Internet research is a good thing, once armed with that information, it’s still important to work with a licensed mortgage professional who will ask the right questions to tailor a custom-fit mortgage that works for short and long term goals.