Recent reports from two major Canadian banks, CIBC and ScotiaBank, shed light on the landscape of millennials and their aspirations for homeownership, as well as the evolving role of the Internet in the mortgage-seeking process. In summary, nearly two-thirds of millennials express a desire to own a home in the next five years, yet a significant portion lacks the funds for a down payment. While 96% of Canadians turn to the Internet for information, 70% still rely on advisors for mortgage guidance.
In the 18-24 age group, 64% of Canadians intend to transition to homeownership, with 63% aiming to buy within the next five years. However, a substantial 44% have not commenced saving for a down payment, citing this financial hurdle as their primary obstacle. Rising real estate prices further complicate their ability to enter the market.
A majority (56%) of Canadians empathize with the challenges faced by the younger generation and advocate for measures to facilitate their entry into the housing market. A significant 77% believe that purchasing a home is more challenging for today's youth compared to previous generations.
Key findings from the CIBC poll on millennials and homeownership include:
- 64% of Canadians aged 18–34 plan to buy a home, with 63% aiming to do so within the next five years, and 44% have yet to start saving for a down payment.
- The largest obstacle for millennials (54%) planning to buy a home is saving enough for the required down payment. Other challenges include job security and earning enough for mortgage payments (53%) and concerns about rising real estate prices (46%).
- 56% of Canadians believe that steps should be taken to assist young Canadians in entering the housing market.
- 77% of Canadians perceive that buying a home today is more difficult for young Canadians compared to previous generations.
For mortgage brokers and consumers, this data presents an optimistic scenario. Increased competition in the market may lead to more tailored mortgage products with a broader array of options. While historically low interest rates make it easy to find a low advertised rate, it's crucial to recognize that mortgages involve more complexities beyond rates alone.
Homebuyers should educate themselves on various mortgage aspects, such as pre-payment terms, penalties, fixed vs. variable options, and open vs. closed arrangements. Each situation is unique, requiring a customized strategy. Despite the wealth of information available online, collaborating with a licensed mortgage professional remains essential. Such professionals can guide buyers through the intricacies of mortgage decisions, ensuring a custom-fit solution aligned with both short and long-term goals.