72% of Aspiring Home Buyers Delay Purchases, Await Rate Cuts

 72% of Aspiring Home Buyers Delay Purchases, Await Rate Cuts
May 27, 2024

A new Ipsos poll conducted on behalf of BMO finds that a significant portion of Canadians are delaying their dream of homeownership due to rising mortgage rates. Here's a breakdown of the key findings:

  • Three-quarters (72%) of aspiring homeowners plan to wait until mortgage rates drop before pulling the trigger on a purchase. This figure has grown by 4% compared to last year.
  • Only two-fifths (39%) of non-homeowners express interest in buying a home in the future. This includes a majority of Gen Z (51%) and Millennials (56%).
  • A significant number (one in four, or 26%) expect to receive financial help from parents and grandparents for their down payment. This includes a majority of Gen Z (52%) and a third of Millennials (31%).
  • Over a third (36%) of parents and grandparents expect to help their children out financially with their home purchase within the next year. This includes a majority (54%) of Millennial parents.
  • Climate-related factors are becoming increasingly important for homebuyers. Four in ten (40%) say these factors will influence their decision, with Gen Z (54%) and Millennials (49%) being most likely to prioritize them.

Rising Costs and Financial Anxiety

The high cost of housing and rising interest rates are causing financial anxiety for many Canadians. Here are some additional findings from the study:

  • Nearly six in ten (56%) Canadians report feeling anxious about inflation.
  • The cost of living is another major concern, with over half (58%) reporting increased anxiety.
  • Housing costs are ranked as the leading source of financial anxiety among respondents.
  • Despite these concerns, the vast majority (85%) perceive themselves as making at least moderate financial progress.
  • Two-thirds (67%) express confidence in their overall financial situation.

Impact on the Housing Market

The wait-and-see approach by potential buyers due to rising mortgage rates could have a significant impact on the housing market. This may lead to a slowdown in sales activity and potentially affect housing prices.

Overall, this study highlights the challenges that many Canadians face in achieving homeownership. Rising interest rates, combined with other financial anxieties, are forcing many to delay their home buying plans.

Source: BMO Ipsos Survey, May 2024

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