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Jun 14, 2023

Canadians waiting for mortgage rates to drop

While homeownership is considered an important financial milestone for many Canadians, concerns about interest rates, inflation, and a possible economic recession have affected their approaches to homebuying, says BMO’s ‘Real Financial Progress Index.’ Over two-thirds (68%) of Canadians plan on waiting until mortgage rates drop to purchase a home. The majority (68%) feel buying a home is more out of reach compared to their parents. BMO Economics says Canadian housing activity has rebounded from the slow start in largest monthly rise since 2009. However, even after last year's price correction, the combination of past price gains and higher mortgage rates leaves housing affordability near the most challenging level in more than 30 years. Half of Canadian homebuyers (51 per cent) are deferring their home purchases because of their concerns about the economy and 18 per cent plan on waiting until 2024 or later. Twenty percent are no longer sure if or when they will buy a home. Housing costs (71%) are among the top three sources of financial anxiety for Canadians, after fears of unknown expenses (83%) and concerns about their overall financial situation (81%).

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