Last year’s mortgage rule changes clearly prevent younger buyers from entering the housing market, says one veteran, but there’s an even bigger hurdle in the way.
“One of the things that came out of the report is the impression millennials have that government actions on restrictive mortgage insurance measures are imminent,” Phil Soper, president of Royal LePage, told MortageBrokerNews.ca. “Still, I would say a bigger hurdle was a 20% year-over-year price appreciation,” which had occurred before the mortgage rule changes.
According to the most recent Royal LePage report, 49% of cutting-edge millennials believe federal mortgage regulations have had an impact on affordability.
As a result, they were forced to consider low cost homes.
“When looking for a home, 53% of cutting edge Generation Y buyers across Canada are willing to spend up to $ 350,000, which would typically buy them a 2.5 bedroom, 1.5 bathroom property. bathroom nationwide, with 1,272 square feet of living space, ”the report says. “Yet, with 58% of respondents having an annual household income of less than $ 69,000, and only 34% currently seeking a sufficient down payment of more than 20% to qualify for a mortgage in this price range, the real logistics Homeownership can be quite difficult.
The study also found that 61% of millennials prefer to buy a single-family home, but only 36% think this wish is realistic.
“In addition to high home values, cutting-edge millennials also face increasingly stringent mortgage stress testing regulations, which are pushing potential buyers away, choosing to either stay in the mortgage market. the rental to save enough money for a down payment, or to move to a more affordable price. regions ”, reads the report.
“When asked, 64% of cutting-edge millennials currently believe homes in their area are unaffordable, with a significant proportion of respondents in British Columbia (83%) and Ontario (72%) saying prices are just too high. Of those who don’t believe they can become homeowners in the next five years, 69% say they cannot afford a house in their area or the type of housing they want, while about a quarter ( 24%) not to qualify for a mortgage. “
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