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A strong majority of aspiring homeowners are sitting on the sidelines waiting for interest rates to fall before they will look to purchase a home, a new survey has found. BMO recently released the latest data from its Real Financial Progress Index, which found 72 per cent of aspiring homeowners are waiting for interest rate cuts before they look to buy a home.
The survey also found most Canadians still believe owning a home is one of life’s biggest aspirations with 62 per cent agreeing with the statement. That said, it also uncovered that 56 per cent of aspiring homeowners now believe buying a home is unattainable.
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Among generation Z (individuals in their 20s), 51 per cent still aim to own a home someday versus 56 per cent of millennials (Canadians in their 30s and early 40s).
Yet a third of gen Z, and 37 per cent of millennials, believe they will have to wait until 2025 or later.
Among the 39 per cent who plan to buy in the near-term, roughly a third plan to do so this year. The remainder stated they would be putting off their purchasing plans to 2025 and beyond.
The BMO study also found that 52 per cent of gen Zs will seek financial help from parents or grandparents. That is compared with 31 per cent of millennials. Broken down further, 16 per cent of gen Z and 12 per cent of millennials will seek help from family specifically for the down payment on a purchase of a home.
At the same time, many are saving, including 58 per cent of respondents who are first-time buyers, who will use the First Home Savings Account. The new federal plan allows first-time buyers to contribute up to $8,000 annually with a lifetime maximum of $40,000 in contributions.
The advantage of the account, BMO added, is that contributed money grows tax-free and can be withdrawn tax-free. As well, contributions provide a tax deduction, potentially providing a tax refund that could be further used to bolster savings for a down payment.
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